Yesterday saw fresh lows for both GBPUSD and GBPEUR as Bank of England Governor Mark Carney sent a dovish tone through the airwaves at the shock event held at Queen Mary University in London. Mark Carney said that collapsing oil prices and an “unforgiving global environment meant that tighter monetary policy was not necessary”. Ruling out an immediate BoE rate hike as his dovish tone signalled poor UK growth and cited the current turmoil occurring globally as well. UK CPI was released shortly before, posting a better than expected 0.2% y/y.
On other news, the IMF slashed global growth forecasts yesterday after China registered its worst GDP reading in 25 years, adding to speculation that another financial meltdown looms. The IMF now forecast that the world economy will grow at 3.4% this year and 3.6% in 2017, the IMF put both years down 0.2% from its previous estimates.
The World Economic Forum is due to start in Davos which will be attended by central bankers, prime ministers, finance ministers, trade ministers, and business leaders from over 90 countries. Keep an eye out for headlines surrounding threats to global growth. Meanwhile, UK data once again comes under scrutiny, this time it is the employment data. The average earning, claimant change and unemployment rate are all due for release. Crossing the pond we are set to see the latest reading on inflation and building permits.