Pound weaker on inflation projection

The pound weakened in relation to the euro Wednesday, trading at 85.97p to the shared currency on a Bank of England forecast that inflation will remain below 2 percent and could go below 1 percent, and that economic recovery will continue to be slow.

According to the UK Office for National Statistics, consumer inflation there was at an annual rate of 1.8 percent in June.

The US dollar as also lower versus the euro, trading at $1.4201 to the shared currency in late morning trade in New York, ahead of a new decision on US interest rates by the Federal Reserve, due later in the day, in which the Fed is expected to hold rates steady for the time being.

Meanwhile, the Norwegian krone gained on the euro after Norges Bank held interest rates there unchanged at 1.25 percent but said that it could begin to raise rates sooner than the middle of next year, as had been previously expected.

At late morning in New York the krone traded at 8.6888 to the euro.

The yen was weaker versus the dollar and the euro as it traded at ¥96.2350 to the greenback and at ¥136.6586 to the shared currency.

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