Sterling Tumbles After the BOE Holds Rates but Cuts Growth Rate Forecasts

The British pound slumped versus most of its rivals including the U.S. dollar after the Bank of England cut its U.K. growth outlook on expectation that Brexit will continue to take a toll on U.K. investment and growth.

Sterling pulled away from an 11-month high of 1.3266 hit earlier in the session and dropped more than 0.8 percent to $1.3111, heading for the biggest drop since June. The BOE left interest rates on hold at record lows of 0.25 percent after its monetary policy meeting on Thursday.

The central bank also cut its economic growth forecast for this year and next. Particularly, the BOE forecasts economic growth of 1.7 percent this year and 1.6 percent in 2018. These figures marked a decrease from previously expectations calling for growth rate of 1.9 percent in 2017 and 1.7 percent next year.

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