|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Friday 19th of December 2008
December 18, 2008

Sterling plummets amid doom and gloom


by Kay Murchie
”Sterling

Following the doom and gloom surrounding the UK economy, the pound has tumbled to just above 95p to the euro - equivalent to around €1.05 to the pound.

Official figures today revealed that the UK’s public finances deteriorated sharply again in November, with net borrowing rocketing to a high of £16 billion. The figure was far higher than analysts expectations who forecast £13.7 billion.

Yesterday, figures from the Office for National Statistics revealed that in the three months to October, the number of people out of work in the UK rose by 137,000 to 1.86 million.

This represented the highest level in over a decade and takes the unemployment rate up from 5.8% to 6%.

UBS is forecasting that 3 million will be out of work in 2010 and believes the UK is in for a period of ‘prolonged pain’.

Furthermore, earlier this week the Chancellor said the UK economy is likely to suffer more than its counterparts.

Mr Darling said because of London’s position the major financial services centre of the world, the UK is likely to be more severely affected as a result of the profitability being reduced.

The housing market continues to be surrounded by bad news after figures from the Council of Mortgage lenders showed mortgage lending fell to £14.6 billion in November, representing a 22% fall from the previous month and a fall of 51% on the year.

The Council warned that the number of mortgage borrowers three months or more in arrears with repayments will rise to 500,000 in 2009. The number of repossessions is expected to rise from 45,000 to 75,000 in 2009, nearly equalling the 75,500 record of that in 1991.

Sterling was also affected by comments from Charles Bean, the Bank of England’s Deputy Governor, who indicated that interest rates could fall to 0%.

In the last three months alone, the Bank has cut rates aggressively from 5% to 2% in a bid to fight off a prolonged recession.

Discuss this in the Finance Markets forums

Story link: Sterling plummets amid doom and gloom


Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

 

Tags: bleak, , , , , plummet, , , , ,

 

Previous: « Lenders expect mortgage arrears to more than double
Next: German business confidence falls to 18-year low »

Visited 371 times, 161 so far today