The BoE's inflation report has put sterling under selling pressure, now back below 1.11 against the euro

The pound suffered in trading yesterday, losing over a cent (1.0%) to the euro after the Bank of England's November Quarterly Inflation Report struck a more dovish tone than expected.

• Bank of England Governor Mervyn King in a press conference reiterated an earlier opinion that a weaker currency should lend support to the recovery, putting pressure on sterling.
  
• King continued, stating that UK economy has "only just started" along its road to economic recovery, and told reporters that the central bank is keeping an open mind over the prospect of further boosting its quantitative-easing programme.
  
• Analysts said this reinforced the view that UK interest rates would remain at low levels for an extended period weakening demand the pound.
  
• The comments reversed slight gains made in early trading in the wake of positive employment figures. It was revealed that the overall UK jobless rate held steady at 7.8%, beating market expectations of a rise to 8.0%.
  
• In addition, the number of new people claiming employment benefit fell to 12.9K in October, a considerably improved figure from the 20.8K the previous month.