British Pound Continues to Fall
The British pound remains weak versus US dollar. The GBP/USD pair fell by 0.26% and traded at 1.2756 level. Analysts suggest, that the pound will hit historic lows against both the euro and US dollar before March, because Prime Minister Theresa May's Brexit proposal looks almost certain to be rejected by parliament. According to the Bank of England's latest Brexit analysis, if Prime Minister Theresa May fails to pass her Brexit plan, the pound would fall 25% under a worst-case scenario.
The BoE’s report also painted a dismal economic picture if Britain and the EU cannot reach a withdrawal agreement. The Bank of England warned that a no-deal Brexit would cause the economy to decline by 8%, with unemployment rising to 7.5% and interest rates jumping to 4%.
Today’s economic data from the UK showed, that house price inflation accelerated in November more than expected. Data from the Nationwide Building Society (Nationwide) showed, that the house price index rose by 1.9% yoy in November, after rising 1.6% in October. Economists had expected housing prices to rise by 1.7%. On a month-on-month basis, the house price index rose 0.3% in November after remaining unchanged in October. Economists had expected a modest gain of 0.1%.