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May 2017

Bank of England downgrades UK growth forecast

Published: Thursday 11 May 2017

By Rachael Kinsella
The Bank of England (BoE) has lowered its economic growth forecast for the UK to 1.9 percent, lower than February’s prediction of 2.0 percent. The BoE says that the downgrade follows a slowing in consumer spending. Rising inflation and poor income growth were cited as the main reasons for consumers feeling the squeeze; reflected in disappointing retail sales data and a surprisingly steep drop in new car sales.

As was widely anticipated, interest rates remain at 0.25 percent.

David Johnson, Director at Halo Financial, comments, “While the latest Consumer Spending and Gross Domestic Product (GDP) data disappointed, recent Purchasing Managers’ Index (PMI) results have, in contrast, looked very positive, providing some extra momentum for the Pound and balancing sentiment to some degree.”
David Johnson, Director, Halo Financial

“In advance of today’s “Super Thursday” announcements, Sterling was on the rise again, reaching rates against its major currency partners not seen for months and even years. The Pound was testing the EUR 1.20 level and the USD 1.30 level. However, immediately following today’s release of BoE Monetary Policy Committee meeting minutes, Sterling fell against both the Euro and US Dollar from the highs seen early this morning; falling by 0.40 percent and 0.43 percent respectively.”

He continues, “Despite all these key economic figures being released and the jumpiness of the Pound in response, we believe markets will continue to focus on the UK general election and the ongoing Brexit negotiations, which are likely to have a greater impact on Sterling than snapshot economic data and forecasts. Volatility and uncertainty will continue for the Pound in its major currency pairings. We are seeing that in movement across the Euro, US Dollar, and Australian Dollars, in particular.”  

About Halo Financial

Halo Financial is a leading UK foreign exchange brokerage, offering a comprehensive range of services to individuals and businesses since its inception in 2005. The business prides itself on offering a flexible and personalised approach for each of its clients, simplifying the seemingly complex foreign exchange market to maximise savings in currency transactions, protect against currency risk and make money go further.

Staffed by qualified technical analysts, the company is authorised by the Financial Conduct Authority and HM Revenue and Customs.

“Excellent”, “Reliable”, “Professional”, “Knowledgeable”, and “Helpful”– just some of the great feedback received as a Gold Trusted Service Provider for Feefo.com. The team at Halo are proud that customers rate their services so highly and are happy to recommend to others. The company is always striving to provide the best possible service and to innovate services and products in line with customers’ ever-evolving needs.

Halo Financial won Best Customer Focus category in the 2016 Best Business Awards; received OPP Gold for Best Supporting Service; the Gold Award for Financial Support and Innovation from Relocate Magazine, Commendations in the 2016 and 2017 Moneyfacts Awards and has 5 out 5 Star Customer Gold Merchant Status via independent review website, Feefo.com, winning their Gold Trusted Service award. 

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news