Good Morning
Again we see the Great British Pound taking a hammering on what is a very quiet day for data releases. Attention today will be focussed on the appearance of Bank of England Governor Carney before the Treasury Select Committee, along with MPC members David Miles, Nemat Shafique and Martin Weale. The meeting takes place at 14.45 today.
Martin Weale was one of two MPC members to vote for an increase in the policy rate at the August meeting. The hearing will provide will provide markets with the opportunity for a detailed discussion of the thinking behind the views of the policy positions on the Committee.
Bank of England governor Mark Carney continuously argues that there is no need to raise interest rates, central to his case is the mountain of debt financing property. Home loans account for almost 90 percent of the 1.45 trillion pounds owed by UK households. In London, where the average home costs 500,000 pounds, first time buyers are paying almost nine times their annual income to get onto the housing ladder.
Sterling continues to fall at a worryingly fast pace as a Scottish split would hit UK growth. GDP growth would be around 0.75 percentage points lower than its previous estimate in the event of a ‘Yes’ vote. Such a large fall in growth would make interest rate rises likely, have a marked negative impact on sterling and reduce gilt yields.
So what is next for the UK? The prospect of Scotland voting to leave the UK next week has injected huge uncertainty into the financial markets.
Uncertainty is something that investors famously dislike. So there are fears that they will take their money out of Britain rather than face all the unanswered questions over the effect of Scottish independence on the economy and markets.
GBPEUR 1.2458
GBPUSD 1.6136
EURUSD 1.2951
GBPSEK 11.445
GBPAED 5.9288
GBPAUD 1.7634
EURGBP 0.8027
GBPJPY 171.94
GBPTHB 51.930
GBPCHF 1.5039
Please contact me to discuss SPOT pricing, FORWARD pricing or alternatively placing MARKET ORDERS at pre-desired rates.
P.S. WHY NOT TAKE ADVANTAGE OF THE STRONG USD AND LOOK AT SECURING GBP ON A FORWARD CONTRACT FOR UP TO 2 YEARS IN ADVANCE. WE ONLY REQUIRE A 3% GBP DEPOSIT TO SECURE A RATE GIVING YOU PEACE OF MIND AGAINST RATE FLUCTUATIONS.
Kris Charalambides
Senior Account Manager
kris@imsfx.co.uk
www.imsfx.co.uk
Direct Dealing Line : 0207 183 7928
Dealing Desk : 0207 183 2790