The Bank of England forecast above-target inflation for the next two years and downgraded its growth forecast.
King did not sound concerned about inflation, which might indicate a willingness to tolerate a high CPI. He also said more needs to be done to stimulate external demand in the U.K. economy, which could be an attempt to talk down the pound or even hint at rate cuts.
I wrote about the potential for a short-term bounce yesterday but that appears to be premature. Now. the drop to a fresh six-month low highlights support in the 1.53/1.54 zone.
Bids down to 1.5530 have given way but strong demand remains in the 1.5515/00 area.
