Sterling Hits 14-Month Low Against Dollar

By Josie Cox 

        The British pound hit a 14-month low against the U.S. dollar on Thursday, with investors continuing to shun the currency after the Bank of England on Wednesday slashed its forecasts for growth and inflation, leading the market to delay expectations for a first hike in interest rates.
        In early trade, sterling stooped to $1.5763, its lowest level since September 2013, while also dropping to a November low against the euro.
        On Wednesday, in its closely watched quarterly Inflation Report, the Bank of England said it expects the economy to grow 2.9% next year, weaker than the 3.1% expansion seen in August, and it foresees inflation "markedly" below the levels forecast in August over the coming 12 months, at around 1%.
        The bank said it foresees a first rate increase, which would make the currency more attractive to investors, in the third quarter of 2015. Derivatives contracts linked to future interest rates also now signal a first move in October 2015.
        Peter Dragicevich, a currency strategist at Commonwealth Bank of Australia, meanwhile, said he sees the BOE "remaining on the sidelines" and not hiking rates until November 2015.
        In equity markets Thursday, stocks rebounded following a sharp fall in the previous session after euro area industrial production data marginally missed expectations.
        In early trade, the Stoxx Europe 600 index was 0.4% higher, supported by a 0.7% rise on both Germany's DAX-30 and France's CAC-40 indexes. The FTSE 100 in the U.K. climbed 0.2%.
        Earlier France's consumer-price index came in flat on the month in October, compared with forecasts for a 0.1% decline. On the year, the CPI was up 0.5%. In Germany, the annual inflation rate stood at 0.8% in October for the fourth month in a row, in line with expectations.
        In individual stocks, German salt and fertilizer company K+S AG was one of the biggest gainers on the pan-European index after it reported revenue and earnings rose in the third quarter, helped by strong demand and positive price developments, allowing it to raise its full-year outlook.
        Brent crude continued to push lower, down 58 cents at $80.54 a barrel having suffered yet another selloff on Wednesday.
        Year-to-date, the commodity is down more than 26%. Since the start of the month it has suffered a more than 5.5% decline. Gold was 0.1% higher on the day at $1,157.60 a troy ounce.
        Write to Josie Cox at josie.cox@wsj.com
        (END) Dow Jones Newswires
        November 13, 2014 04:08 ET (09:08 GMT)