Article by ForexTime
The British pound dived to a four-month low against the US dollar on Wednesday following a dovish Bank of England economic report that talked of subdued wage growth and signaled a delay in raising interest rates.
The BoE quarterly Inflation Report showed wages fell in the second quarter compared with the same period last year, and prompted investors to push back expectations of when rates would rise.
As a result sterling fell 0.7 percent to $1.6691, the lowest since mid-April, and the euro rose to a six-week high of 80.20 pence .
The report came shortly after UK employment data which painted a mixed picture of the labour market as unemployment fell to 6.4 percent – its lowest since the end of 2008. But average wages in Britain declined 0.2 percent year-on-year in the three months to end-June. The BoE said it expected earnings to grow just 1.25 percent this year, and indicated wage growth would be key to determining the timing of interest rate rises.
Article by ForexTime
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