Sterling slips as investors book profits ahead of services sector survey

A pedestrian walks under an arch opposite the Bank of England in London March 5, 2015. The BoE said May 3, 2019 that markets should expect a bigger degree of rate tightening in the next few years than they currently assume if the economy grows as policymakers expect and inflation is to be brought back to target. — Reuters pic
A pedestrian walks under an arch opposite the Bank of England in London March 5, 2015. The BoE said May 3, 2019 that markets should expect a bigger degree of rate tightening in the next few years than they currently assume if the economy grows as policymakers expect and inflation is to be brought back to target. — Reuters pic

LONDON, March 28 — The British pound edged lower from two-week highs today as investors booked some profits from this week’s rally and prepared for a monthly survey on the UK’s vital services sector.

Sterling was little moved by a relatively hawkish message from the Bank of England yesterday, as investors continue to focus on persistent political uncertainty surrounding when, how and on what terms Britain will leave the European Union.

Economic data has also had relatively little impact on the pound in recent months, but investors will be watching for his Purchasing Managers’ Index survey for the services sector due at 0830 GMT.

The pound traded 0.1 per cent lower at US$1.3023 after rising above US$1.31 briefly earlier in the week.

Against the euro the British currency was unchanged at 85.76 pence.

The BoE said yesterday that markets should expect a bigger degree of rate tightening in the next few years than they currently assume if the economy grows as policymakers expect and inflation is to be brought back to target.

Few analysts are convinced the bank will act before Brexit uncertainty is lifted, however.

“We believe that persistent Brexit uncertainty combined with concerns over slowing growth overseas will deter the BoE from delivering a more immediate rate hike. We remain sceptical that cross party Brexit talks between the government and Labour will prove successful,” MUFG analysts wrote. — Reuters

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