THE POUND dropped sharply against the dollar yesterday, as markets took a dovish message from the Bank of
Sterling plunged to its lowest level in two months as governor
Carney's comments at his Mansion House speech in June had the opposite effect - the governor indicated that rates could rise before markets expected.
The Bank's statement on unemployment also weighs against the idea of an early interest rate hike. During last year's inflation report, the Bank estimated that 6.5 per cent would be a roughly healthy level of unemployment for the economy. However, the labour market has improved much more rapidly, and the Bank has cut its expectation to 5.5 per cent.
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