Super Thursday: Sterling declines as BoE cuts growth forecasts and warns on household incomes

Held rates at 0.25%

Sterling has retreated from early gains after the Bank of England cut UK growth forecasts and warned households' disposable income will decline next year, while the Monetary Policy Committee (MPC) voted to hold rates at 0.25%.

In its quarterly Inflation Report, the Bank cut its UK growth forecast to 1.7% for this year, down from 1.9% previously, while growth is now tipped to slow to 1.6% in 2018, down from a previous forecast of 1.7%. As a result, the pound has fallen by 0.4% against the US dollar to $1.31670, having earlier rallied to a new 11-month high of $1.3267 on the back of the possibility of a shock interest rate rise today. Similarly, sterling is down against the euro, immediately plunging after the Bank's release. It is down 0.8% against the euro at €1.1067, its lowest level in nine months. The...