Sterling slips as economy stagnates; eyes on BoE
The British pound dropped against the dollar on Friday after data showed the economy had stagnated in July, although it was still set for its second weekly rise before a Bank of England policy meeting next week.
UK gross domestic product remained unchanged in July after growing 0.4% in June, the Office for National Statistics said, as manufacturing output, which makes up 9% of the economy, dropped by 1.3% on the month.
The pound was down 0.2% against the dollar at $1.3553, but was still set for a 0.3% weekly rise.
The BoE is widely expected to keep its benchmark Bank Rate unchanged on September 18, after a split decision to lower the rate to 4% in August.
Investors instead were focusing on the central bank's plans to reduce its bond holdings, known as quantitative tightening, which are announced at the September meeting every year.
The BoE has reduced its bond holdings by 100 billion pounds ($135.32 billion) over the past year and Governor Andrew Bailey said earlier this month that the future pace of QT was an "open decision".
A BoE survey of investors last month showed a median expectation that the central bank will slow the pace over the next 12 months to 72 billion pounds.
Against the euro , the pound fell 0.1% to 86.51 pence but remained within its recent range.
Source : Reuters
