The pound

JasonLVC

In the absence of the Inspector M

LAST WEEK:

• Last week Mervyn King set a cautious tone to the outlook for the UK economy pointing out that the economy of our biggest trading partner, namely Europe, seems to have stalled.
• This coupled with the weakest business investment data since records began in 1967 pointed to the inherent weakness in the UK economy.
• The one ray of positivity came from the revision higher to Q4 GDP to 0.3%, however even this was eclipsed by a downgrade for Q3 that brought the overall performance for the UK economy for 2009 to a contraction of 5%.

THIS WEEK:

• Monday 9.30am PMI for Manufacturing for January previous 56.7
• Monday 9.30am BoE Mortgages Approvals for January previous 59.0
• Wednesday 9.30am PMI for Services for February previous 54.5
• Thursday 12pm BoE Interest Rate decision
• Friday 9.30am Input and Output prices for February previous 0%m/m, 0.2% m/m

Extract from markets summary. Clearly a lot of breath holding until the interest rate setting meeting on Thursday occurs.

Mr_Mumble

Rochdale_Pioneers wrote: »

And here we go. The bankers broke the economy, the bankers now want to make ordinary people pay the bill. So vote Tory or we'll crash the pound.

The British bankers specifically? As the USD to GBP is a relative measure I presume you mean this, of course it has nothing to do with spendthrift governments and their burgeoning deficit...

March 1 (Bloomberg) -- The pound and the euro tumbled on speculation European nations will struggle to rein in record budget deficits

I have to keep repeating this... HM Treasury estimates a net cost of £10bn of the banking bailouts, excluding bailout money the deficit now is ~£800bn, yeah all down to 'bankers'!

Except that crash the pound and people still have jobs, and homes, and services. The bankers can bluster all they like, Turkeys still don't vote for Christmas.

Except a crash in the pound will mean a sharp reduction in 'services' (quite rightly imho - 'football coordinators', 'park supervisors' and 'diversity officers' are a grotesque misuse of capital). As today's Gilt action shows the British government will find it harder to fund itself in a devaluing currency. It will also mean less affordable homes with imported inflation leading to an early rise in interest rates.

Today the market made it clear: you vote for Labour and you vote to impoverish yourself, you have been warned.

Graham_Devon

Bit more been added now on the BBC news story I used earlier:

Pimco's head, Mohamed El-Erian, told the BBC the UK's creditors would become "significantly concerned" if the UK did not cut spending and grow quickly.
He also expressed concern over other European nations with troubled public finances - such as Greece and Spain.
Governments need companies such as Pimco to keep buying their debt.
If large bond buyers believe that governments will default on their debt or that they will keep falling in value, they will not buy the debt - further driving up the cost of borrowing for those countries.
The UK's total borrowing for the financial year now totals more than £122bn.
Mr El-Erian told the BBC World Service: "If the UK cannot combine higher growth with fiscal adjustment, then its debt dynamics will continue to deteriorate to a point where its creditors will become significantly concerned."
He added that there was only a "very small" chance that the UK would default on its debt.

So seems to be a case of election fears, and also debt fears which is dragging the pound down. It's recovered a little from earlier though.

Kohoutek

I wonder how far the pound has to go before the government does something...surely if we got close to parity with the dollar they would do something to reassure the markets rather than let the situation spin out of control.

I suppose McMoron will blame it on 'speculators'.

Really2

Updates seem to have stopped?

Graham_Devon

Really2 wrote: »

Updates seem to have stopped?

Articles in the news seem to have stopped too.

It's generally what happens when there isn't a story.

chucky

Really2 wrote: »

Updates seem to have stopped?

without checking i must assume that it must have gone up today...

the £££ has further to fall btw and that's not a bad thing

Emy1501

Really2 wrote: »

Updates seem to have stopped?

Its no longer headline news. Small rises or falls are hardly relevant.

What happened on Monday was enough for the pound to be headline news for many newspapers yesterday.

Graham_Devon

Emy1501 wrote: »

Its no longer headline news. Small rises or falls are hardly relevant.

What happened on Monday was enough for the pound to be headline news for many newspapers yesterday.

It's just forumonics at work.

Really is making the point that the thread has not been updated, and the pound, was at that time, half a penny up on the dollar. Therefore, howcome this wasn't updated, insinuating that I'm only interested when it's falling.

Hence chucky's reply.

However, yesterday, the pound fell. I didn't report that either.

Why didn't I report that? Just like today, the change was insignificant.

chucky

Graham_Devon wrote: »

Hence chucky's reply.

However, yesterday, the pound fell. I didn't report that either.

Why didn't I report that? Just like today, the change was insignificant.

you really are a clown - here's exactly what i said. not what you've just made up.
do you even know what you type!!! :eek:
there was no mention of you!!!

chucky wrote: »

without checking i must assume that it must have gone up today...

the £££ has further to fall btw and that's not a bad thing