Weak pound could add to UK inflation, say economists
- Date: 10-May-2022
- Source: The Guardian
- Sector:Economy
- Country:Middle East
Weak pound could add to UK inflation, say economists
The judgment of the markets was swift and brutal. Currency traders took one look at what the Bank of England was predicting for the UK economy and launched a sustained attack on the pound.
It was noon last Thursday when Threadneedle Street announced it was expecting that a 40-year high of more than 10% for the annual inflation rate would coincide with a shrinking economy.
Bank governor Andrew Bailey told a press conference he wasn’t keen on the term stagflation – considering it imprecise. But the parallels with the 1970s were precise enough to trigger sharp losses for sterling. By the end of the day in London, the pound had lost two and a half cents against the US dollar.
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