Investing.com - The pound erased gains on Thursday as the Bank of England left interest rates on hold and said that any future rate increases are likely to be gradual and limited in their extent.
GBP/USD was down 0.26% to 1.3510 by 07:21 ET (11:21 AM GMT), down from around 1.3605 earlier.
The BoE’s Monetary Policy Committee voted to leave UK interest rates on hold at 0.5% and also left its asset-purchase scheme unchanged.
The vote wasn’t unanimous, with Ian McCafferty and Michael Saunders voting in favor of a rate hike.
The decision came after Britain's economy slowed to near stagnation in the first three months of 2018, with gross domestic product rising by just 0.1%.
Officials wanted to keep rates on hold until it becomes clear whether weak first quarter growth was just temporary or if it could persist.
“The recent weakness in data for the first quarter had been consistent with a temporary soft patch, with few implications for ... the outlook for the UK economy,” the meeting minutes said.
“There was value in seeing how the data unfolded over the coming months, to discern whether the softness in Q1 might persist.”
The bank cut growth forecasts, saying it now expects the UK economy to expand just 1.4% this year, down from 1.8% expected three months ago. The growth outlook for 2019 and 2020 was also downgraded, from 1.8% to 1.7%.
The pound was also lower against the euro, with EUR/GBP rising 0.56% to 0.8795 from around 0.8734 ahead of the announcement.