Sterling was trading around $1.6684 at 5pm yesterday, down marginally from its $1.6694 finish in London on Thursday. The pound, which hit a four-month low of $1.6657 during Thursday's session, recorded an intra-day low of $1.6675 during trading in London yesterday. The pound has eased against the dollar in recent weeks, having surged through the $1.70 mark on June 16 for the first time since August 2009 and gone through $1.71 later that month.
A dovish quarterly inflation report on Wednesday from the Bank of England has weighed on the pound in the last few sessions, as economists continue to weigh the likely timing of the first rise in UK base rates from their record low of 0.5 per cent.
In the report, the Bank halved its forecast of pay growth this year to just 1.25 per cent. Labour market figures on Wednesday from the Office for National Statistics showed under-lying pay growth lagging well behind inflation in the second quarter, showing year-on-year growth of just 0.6 per cent in this period.
The ONS, confirming yesterday that the UK economy grew 0.8 per cent in the three months to June, said gross domestic product in the second quarter was up 3.2 per cent on the same period in 2013. It had estimated year-on-year growth at 3.1 per cent in its initial second-quarter GDP figures last month.
The ONS figures show UK manufacturing output rose just 0.2 per cent quarter-on-quarter in the three months to June. Construction output was flat. This was a better outturn than the fall of 0.5 per cent estimated by the ONS in its initial figures. Output of the UK's dominant services sector rose 1 per cent quarter-on-quarter in the three months to June.