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mrsquirrel
Joined: 13 Dec 2006
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 Posted: Mon Jun 25, 2007 9:06 pm Post subject: The strong pound. |
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Looks like there will be another interest rate hike in the UK which is going to further strengthen the pound again.
If you are sending money back to the UK or using a foreign currency account here it might be a good idea to get that money changed.
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Despite the expectation of most analysts that the Bank of England will hold interest rates at 5.5 percent when its Monetary Policy Committee meets on Thursday, many analysts are convinced that more rate hikes are soon to come, with most believing that rates will be up to 5.75 percent by August and a few even expecting that to rise to 6 percent by the end of the year.
Several things point in the direction of more interest rate increases. The consumer price index, a major way of measuring inflation, is at 2.8 percent at present, significantly above the 2 percent goal set by the government. While house price growth has slowed, it still remains at an annual rate of around 10 percent. Wages are on the rise, at least according to some sources. Even though shop prices were only up by 0.4 percent in May from the same time last year, the price of food has continued to rise at a faster rate.
Still, some manufacturers are arguing for caution in rate hikes, fearing that if rates rise to quickly economic growth in the UK will be halted while the rate of inflation will not. Despite the fact that consumer and business confidence remains high, their worry is that if the cost of borrowing goes up too much or too quickly, it will hurt business. |
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Sterling strengthened by BoE surprise
By Peter Garnham
Published: June 20 2007 11:15 | Last updated: June 20 2007 18:47
The pound hit a two-week high against the dollar and a 15-year peak against the yen Wednesday, after the minutes of the Bank of England�s latest Monetary Policy Committee meeting bolstered expectations for a near-term rise in UK interest rates.
The minutes of the committee�s June meeting � at which it kept interest rates on hold at 5.5 per cent � revealed that four of its nine members, including BoE governor Mervyn King, voted to raise rates by 25 basis points to 5.75 per cent. Analysts had thought that just two members voted for such a move. |
I read somewhere (can't find the link just now) that it's expected to hit 2.5 dollars to the pound within the next year. |
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Axl Rose
Joined: 16 Feb 2006
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| Posted: Tue Jul 03, 2007 11:23 pm Post subject: |
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Looking at the big picture, in the context of the last 5 years, the exchange rate at the moment is kind of average.
As you can see, look at 2004!!  1 million Won was as low as 450 GBP. So a 2.2 million salary was worth less than 1000 GBP whereas now it's worth 1,185. |
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