MW: British pound extends losses as BOE slashes CPI outlook
By William L. Watts
LONDON (MarketWatch) -- The British pound fell to a new all-time low against the euro Wednesday, after the Bank of England slashed its U.K. inflation outlook in a quarterly report. The pound traded at 81.93 pence against the euro in recent action after hitting 82.12 pence in the wake of the report, which appeared to leave the door open to further, aggressive rate cuts by the central bank. The report says the U.K. economy likely slipped into recession in the second half of 2008 and likely won't begin to recover until the second half of 2009. The report says consumer inflation is likely to fall "well below" the bank's 2% target by 2010 if official interest rates match market expectations over the forecast period. The downward revision in the inflation outlook since August is the largest since the Monetary Policy Committee was formed in 1997.
