Bloomberg: JP Morgan predict pound to drop up to 13% more....

WTF?_2

http://www.bloomberg.com/apps/news?pid=20601087&sid=axzvJVRoRdA4&refer=home

Nov. 17 (Bloomberg) -- The pound will drop 13 percent against the dollar and 8 percent versus the euro as U.K. banks shrink foreign borrowings and the country's policy makers favor a weaker currency, JPMorgan & Chase Co. said.
The pound will ``trough'' at $1.28, a level not seen since 1985, and sink to a record low of 92 pence per euro in early 2009 as Britain's banks shrink foreign currency borrowings and demand for safety strengthens the U.S. dollar, JPMorgan said. U.K. banks' total foreign-currency borrowings equaled 276 percent of gross domestic product as of June 30, JPMorgan said.
``The U.K. may not be Iceland but the temperature is certainly dropping,'' wrote London-based Paul Meggyesi, a currency strategist at JPMorgan, in a research note dated Nov. 14. ``We take an axe to our pound forecasts to reflect the risk of continued bank deleveraging.''
The pound fell for a sixth day to $1.4682 as of 10:04 a.m. in Tokyo from $1.4740 on Nov. 14. It traded at 85.31 pence per euro, after a record decline last week.
The median estimate of 30 analysts in a Bloomberg News survey is for the pound to trade at $1.56 and at 80 pence per euro in the first quarter. JPMorgan had previously said the pound would bottom at $1.48 and in ``the low 0.80s'' against the euro.

Ouch. If we price houses in non-sterling currency of course, they're dropping even faster than they already are.

(Mind you, I think the Euro will suffer in the coming months so some ground regained there).

abaxas

!!!!!!! So what's your hpc username? Go on tell all!

purch

It's allright...................Gordie has it covered !!!! :eek:

fatpig_2

If you think things are bad now just wait a few years, we're gonna be really fooked then

WTF?_2

On the bright side, everyone's sterling denominated debt is shrinking in real terms!

Hooray debtors - you are owing less every day that the pound devalues!

StevieJ

!!!!!!? wrote: »

On the bright side, everyone's sterling denominated debt is shrinking in real terms!

Hooray debtors - you are owing less every day that the pound devalues!

Does that mean all the foreigners are going to swoop on our housing market and push up prices?

wintersunshine

What sort of person cheers the demise of their own countries currency? This surely is the weirdest website. It's like stepping through the looking glass. Unbelievable.

sabretoothtigger

!!!!!!? wrote: »

On the bright side, everyone's sterling denominated debt is shrinking in real terms!

Hooray debtors - you are owing less every day that the pound devalues!

How does that work, surely the ability to pay off that debt shrinks at the same rate or worse

U.K. banks' total foreign-currency borrowings equaled 276 percent of gross domestic product as of June 30

Owch, not heard that one before and I guess they have to repay that debt as it expires and that is a negative force.
Hbos has 185bn of debt expiring over the year from june 30th I remember reading, I just didnt realise it was all effectively taken in foreign currency

That does sound very similar to what killed icelands currency, hopefully we dont have to repay it all at once

amcluesent

Of course the £ is dropping like a stone as unfunded ££ billion in debt is run up and Clown struggles to shift any govt. bonds. His promises to pay mean nothing when we're all stony broke and even the benefit-plump 'seekers' are fleeing the sinking ship.

After 10 years of lies, NuLabour bungling and dodgy accounting the UK is again the sick, sick man of Europe.

GDB2222

wintersunshine wrote: »

What sort of person cheers the demise of their own countries currency? This surely is the weirdest website. It's like stepping through the looking glass. Unbelievable.

Nope, the currency going down is one of the best things to happen to this country for ages. We've been incredibly overvalued for ages, hence exports have suffered etc. In the long run, £1 = €1 would create a heck of a lot of jobs. Just as an example, the UK has become 25% cheaper as a tourist destination in the last year.

sabretoothtigger

But we will get less tourists if the world has less money. We import more then we export, so as economys receed we will export less also, overall we will receive less money anyway I think and finance is large part of our exports afaik

Maybe we will start buying british instead of importing and it will be a great positive factor but theres so much we just dont make