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BOE QIR: Inflation and Growth forecasts lowered

FXStreet (Mumbai) - The Bank of England, in its Quarterly Inflation Report (QIR), revised the 2015 and 2016 growth forecasts lower and fired warning shot regarding the disinflationary impact of a strong Pound.

The QIR says, “CPI to remain below 1% until H2 2016 and model forecasts CPI 2017 at 2.1% based on market interest rates last week. Market interest rate assumption based on first rate hike in Q1 2017”

GDP revised lower

Lowers end of 2015 growth forecast to 2.7% from 2.8%

Lowers end of 2016 growth forecast to 2.5% from 2.6%

Weak CPI ahead

Lowers end of 2015 CPI forecast to 0.1% from 0.3%

Lowers end of 2016 CPI forecast to 1.2% from 1.5%

Lowers end of 2017 CPI forecast to 2.0% from 2.1%

End of 2018 sees CPI overshooting target at 2.2%

EUR/GBP spikes to 0.7120 on dovish BOE, QIR

The cross in the EUR/GBP spiked to fresh session highs above 0.71 barrier, after the pound dropped sharply in response to the dovish BOE minutes and quarterly inflation report (QIR).
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USD: Finally the FOMC showing its wild card - MUFG

Derek Halpenny, European Head of GMR at MUFG, notes that the US dollar surged yesterday with rhetoric from Chair Yellen, Vice Chair Fischer and NY Fed President Dudley all indicating the same stance, a December rate hike is “live”.
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