Yesterday retail sales for the UK were released yesterday and were very positive. This enabled the pound to make good gains against a number of major currencies. However, any hopes of a good spike in exchange rate were dashed when the Euro zone announcement for a bailout in Greece was announced. Therefore, despite the strong retail figures the pound still lost ground against most major currencies. I believe that this is indicative of the fact that any longer term any sterling recovery will be sluggish. The main reasons for this are:
- The Bank of England may carry out further QE
- Interest rates are likely to remain low for an extended period in the UK
- Uncertainty surrounding a hung parliament and how the national debt problem may be dealt with
- The UK is expecting huge public spending cuts
- Continued poor economic performance – the UK is a service driven economy and reduced demand for our services is damaging the pound
If you are buying a property abroad, have business transactions to carry out or need to get money overseas for any other reason and want the best exchange rates, just fill in the contact form and I will be in touch with you shortly.