LONDON, June 17 Reuters The pound eased modestly on Monday, ahead of a policy meeting by the Bank of England this week at which the central bank is not expected to cut interest rates, but might telegraph the likely timing of the first drop.

Political turmoil in France last week rattled risk appetite and sent investors fleeing from French assets and the euro which fell 0.6 against sterling last week .

By Monday, the euro had recovered some stability, rising 0.1 against the pound to 84.46 pence.

Against the dollar, the pound has fared less well, falling 0.6 last week, in its largest weekly slide in two months. Sterling was last down 0.1 at 1.2674.

Recent data has shown inflation in the United States is not slowing as quickly as many had anticipated, while the Federal Reserve has said it sees only one rate cut this year.

Meanwhile, UK headline consumer inflation is falling towards the BoE39;s 2 target and markets are increasingly convinced the central bank, which meets on Thursday, will deliver two cuts this year, with close to a 90 chance of rates dropping to 4.75 by December.

The UK consumer price index CPI is due on Wednesday and is expected to show the headline rate rose by 2.0 in May, compared with April39;s 2.3 increase. Much of that drop is a function of household energy bills falling sharply, and BoE policymakers are far more focussed on wage growth and servicesector inflation.

Data last week showed British wages picked up more quickly than forecast.

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