Pound Weakens as BOE’s King Sees Risk of ‘Persistent Low Growth’
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The pound fell to the lowest level in two weeks against the euro after the Bank of England said the U.K. economy may contract this quarter, fueling speculation it will need to add further stimulus to boost growth.
Sterling erased a gain versus the dollar as the central bank warned there was a “greater risk that the U.K. economy may be in a period of persistent low growth.” The Monetary Policy Committee halted expansion of its asset-purchase target, or quantitative easing, last week after some officials raised doubts about the effectiveness of the program. Gilts dropped, pushing 10-year yields up by the most in three weeks.