UK Pound Sterling Increases

The UK pound sterling gained versus the US dollar following the Bank of England’s statement that inflation will possibly drop to zero within the first six months of 2015. It also said there is no risk of deflation in the United Kingdom.

BOE Governor Mark Carney cited decreasing oil prices will turn out positive for the country’s economy with wages expected to increase at the fastest pace in more than 10 years. 

The central bank anticipates inflation to climb above the two percent target in two years and go up above that goal after three years in case interest rates mount as expected by markets.

The pair of GBP and USD moved up 0.65 percent from 1.5226 to 1.5334 sooner than the inflation data.

The BOE is mulling over reducing interest rates below 0.5 percent if inflation ventures deeper into negative territory.

It also raised the growth projections for 2015 from 2.6 percent to 2.9 percent and looks forward to a growth of 2.9 percent by 2016.

The pound was near seven-year highs versus the shared currency with EUR and GBP down 0.61 percent from 0.7447 to 0.7392.