UK Pound Higher, Even After Productivity Forecast Downgrade

UK pound is mostly higher today against its major counterparts, even after the Office for Budget Responsibility (OBR) cut its forecasts for productivity. However, many analysts expect that pounds to weaken in upcoming weeks and months as the Bank of England waits to raise rates until after the Brexit issue is resolved.

The OBR revised its workforce productivity forecasts down to 2.0% from an earlier 2.4%. This revision comes in the middle of a debate over whether or not the United Kingdom should remain in the European Union. With economic data indicating that the UK economy continues to recover at a very slow pace, and with the issue of the Brexit hanging over the country, it is a little surprise that a pound is expected to see some weakness.

For today, though, sterling is heading higher against most of his counterparts. The account is showing a little bit of strength, especially against the dollar, which is suffering after the latest Fed announcement. Many expect this bit of strength to turn to weakness as there is no reason for the Bank of England to raise interest rates anytime soon.

At 14:06 GMT GBP/USD is up to 1.4444 from the open at 1.4260. EUR/GBP is lower, down to 0.7831 from the open at 0.7872. GBP/JPY is up to 161.2220 from the open at 160.5170.

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