The pound extended its decline against the euro and pared an advance against the dollar after the Bank of England said the U.K. economy may shrink in the current quarter as it cut its outlook.
The U.K. currency weakened 0.3 percent to 80.25 pence at 10:35 a.m. London time and was little changed at $1.5880. It strengthened as much as 0.2 percent to $1.5901 earlier.
“The weaker gross domestic product profile reflects the judgment that the broader causes and repercussions of the financial crisis may bear down more forcefully on demand and productivity than assumed” previously, the central bank said in its quarterly Inflation Report published in London today.
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