FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman noted that the Bank of England released its inflation report, which helped drive sterling to a 2-month low.
"The BOE raised its 2014 GDP forecast to 3.5% from 3.4% previously."
"As expected, the bank cuts its wage growth forecast. For Q4, the forecast was cut to 1.25% from 2.5%."
"Carney also emphasized that the MPC does not have a target for wage growth. The report also noted that the spare capacity in the economy is being reduced faster than they expected, now seen at 1%, compared with 1.25% previously. Yields on short sterling futures have fallen as much as 8 bp for contracts expiring in late 2015 and 5 bp for the December 2014 contract, as markets price out some of the risk rate hikes this year."