Showing articles for January 2011

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Biggest drop in confidence since 1992

28 January 2011
This morning's UK consumer confidence survey has shown its biggest fall since 1992.

Consumers are increasingly expecting a painful 2011, both in their own financial circumstances and the economy overall. With VAT up to 20% and negative growth, talk of a double-dip recession is increasing.

This is all bad news for sterling, which is continuing to fall. Unless the Bank of England decides to raise interest rates soon (which seems very unlikely), the Pound could be in for a negative period ahead.

To avoid the risk of falling currency rates making your own overseas purchase more expensive, remember you can fix and guarantee your exchange rate up to 2 years ahead with Currency Index.

Retail sales & mortgage approvals down

21 January 2011
Sterling has been held back today by poor retail sales and mortgage figures in the UK, which showed:

- Only 40,000 new mortgages were approved in November
- Retail sales fell 0.8% in December, and were flat for the year

Analysts were hoping for a slight rise in retail sales, given the Christmas period, and for around 20% more mortgage approvals - both of which would have been indicators of better recovery in the UK economy.

With the sterling-euro rate falling away, aiming for rates of 1.20 may now not be realistic for some time to come.

Factory inflation gives Pound a boost

14 January 2011
After yesterday's losses, sterling has recovered this morning after higher than expected producer inflation rasied the likelihood of interest rate rises in the UK sooner rather than later.

Inflation is running well above target, and an interest rate rise would help to control it - as well as giving the Pound a boost.

The Bank of England yesterday voted for interest rates to remain at 0.5%, but we will not know how the committee vote was split until the minutes are released in a couple of weeks.

To take advantage of improved rates for your own transfers, call Currency Index on 0800 043 2623.