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DIFFICULT JUGGLING ACT FOR THE BOE

 

The International Monetary Fund reduced its U.K. growth outlook after increased uncertainty after Brexit. This has not negatively affected the U.K. equity market as it has risen by almost 6.2%  since the June 23rd referendum. Sterling has taken the biggest hit, but a weaker Sterling is a benefit for UK companies exporting products and services abroad. The other side of this is a weaker pound makes imports become more expensive resulting in higher prices for consumers. The BoE is meeting on 4th August to decide whether or not to reduce interest rates. The picture is still cloudy though as official data showing the impact of Brexit won’t be available until the middle of August, according to the Office for National Statistics.