Institution: Pound dragged down by recent downgrading of inflation expectations by the Bank of England.

In a report, Daniela Hathorn of Capital.com stated that the drop in the pound seems to reflect the Bank of England's recent downward revision of inflation expectations on Thursday. The Bank of England voted 7-2 to keep interest rates unchanged at 3.75%, with two policymakers favoring a 25-basis-point increase. The Bank of England stated that its expectations for inflation in the third and fourth quarters are slightly lower than the path forecasted in April. She said that the market appears to be paying less attention to the voting differences and more to the lower inflation outlook as well as the Bank of England's acknowledgment of progress in inflation decline. However, she noted that the market still expects an increase in interest rates before the end of the year. London Stock Exchange Group data shows that the pound fell to a 10-week low of 1.3202 against the US dollar. The euro rose to a three-week high of 0.8675 against the pound.