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Posted June 2nd, 2008 by Charles Purdy

€ rates and comments – week commencing 2nd June 2008

 

Sterling had another steady week last week. UK house prices still continue to fall while fuel and food costs continue to rise. Consumer confidence is fragile. Not good. However a lot of bad news has already been factored into sterling’s exchange rate against most other currencies.  The key is for there to be no more major bad UK news. The Bank of England meet this week and the expectation is that UK interest rates will be kept on hold.

 

The € sits at €1.265/£1 inter bank. The economic news out of Euro land continues to worsen and highlights a weakening economy. Euro lands balance of payments deficit showed that the strong € is having a serious negative effect on its exports. The European Central Bank meets this week. Inflation is still the major concern but it is thought unlikely that we will any increases in Euro land interest rates anytime soon.

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