GBPUSD news - page 13

New comment
 

UK Shop Prices Dip 1.6% In August - BRC

British shop prices were down 1.6 percent on year in August, the British Retail Consortium said on Wednesday.

That beat expectations for a decline of 0.2 percent following the 1.9 percent fall in July.

Food prices gained just 0.3 percent in August, unchanged from the record low in the previous month.

"As the UK economy continues to pick up, the benefits of subdued cost increases incurred by retailers will be passed on to consumers," said Helen Dickinson, director general of the BRC.

 

Scottish 'Yes' vote could cause eurozone-style currency crisis, Goldman Sachs warns

Goldman Sachs has warned that the UK could fall into a eurozone-style crisis if Scotland votes for independence later this month.

In some of the most bleak predictions economists have made about independence, the Wall Street bank said a "Yes" vote on September 18, while looking unlikely, "could have severe consequences" for both the Scottish economy and the UK overall.

Goldman warned that public services would have to be cut if Scotland goes it alone, and that the country would face much higher borrowing costs.

But the most worrying consequence, the bank predicted, would be that uncertainty over a currency union would cause a run on sterling and a capital flight with echoes of the eurozone crisis.

"The most important specific risk, in our view, is that the uncertainty over whether an independent Scotland would be able to retain sterling as its currency could result in an EMU-style currency crisis occurring within the UK," wrote Kevin Daly, senior economist at Goldman.

He said that despite Holyrood claiming the UK would be forced into a monetary union with an independent Scotland, Westminsters's threat to leave an independent Scotland on its own is "credible".

"One of the main lessons from the euro area crisis is that a reasonably high degree of fiscal and/or financial integration is necessary, as a means of effective risk sharing, for a monetary union to work," Mr Daly wrote.

He predicted that, even if a currency union were agreed, the uncertainty in the months up to a resolution could mean a run on assets based in Scotland.

"Even if the sterling monetary union does not break up in the event of a 'Yes' vote, the threat of a break-up would provide investors with a strong incentive to sell Scottish-based assets, and households with a strong incentive to withdraw deposits from Scottish-based banks."

Although the Bank of England would be able to intervene at first "to prevent the worst of the short-term consequences", the final decision on a currency union would be political.

Additionally, an independent Scotland would mean a "painful" cut to public services, according to the bank. Public spending per head in Scotland is substantially higher than in the rest of the UK, and this gap is likely to increase due to its older population.

read more

 

BOE leaves rates unchanged

The Bank of England was widely expected to leave the interest rate unchanged at 0.50%, despite two members voting for a rate hike back in August. The Asset Purchase Facility was also expected to remain at 375 billion pounds.

GBP/USD remained on low ground towards the publication, trading just above 1.6450. — more coming –

Both Martin Weale and Ian McCafferty voted to raise the rates in August, dissenting against governor Mark Carney for the first time. However, as both inflation and wage inflation remain subdued, some market analysts have pushed back expectations for a first rate hike to February. Others expect a hike to happen as early as November.

The stage is now all set for the Draghi show: the European Central Bank will announce its decision at 11:45 GMT and president Draghi will meet the press at 12:30 GMT.

 

Bank Of England Maintains Status Quo

The Bank of England on Thursday left its key interest rate unchanged once again at its two-day monetary policy meeting after policymakers split on the decision last month for the first time since mid 2011.

The Monetary Policy Committee, governed by Mark Carney, decided to leave its key rate at a historic low 0.50 percent and the asset purchase programme at GBP 375 billion.

In August, MPC members Ian McCafferty and Martin Weale sought a quarter-point hike, but other seven members outvoted their proposal. It was the first split on rates since July 2011.

Markets expect other members to join their call for a rate increase only by early 2015.

"We suspect that low inflation, current very weak earnings growth, and the increased downside risks to economic activity coming from heightened geopolitical tensions and stuttering Eurozone economic activity will cause the Bank of England to be cautious," IHS Global Insight Economist Howard Archer said.

"It is also likely that most MPC members would have been wary of raising interest rates just before the Scottish independence vote due to the potential near-term negative impact that a yes vote could have on the UK economy through increasing uncertainty," Archer added.

Last month, members said any rise in interest rate ahead of any pickup in wages and income growth will be vulnerable to highly indebted households, and might further cause the currency to appreciate.

Central bank data this week showed that mortgage lending to households increased GBP 2.3 billion in July, the highest since mid-2008, as low interest rate and robust recovery improved appetite for borrowing.

However, mortgage approvals declined to 66,569 from 67,085 in June in response to strict lending standards introduced this year.

The strong momentum in economic activity has not translated into high inflation. In July, inflation eased to 1.6 percent from 1.9 percent in June. It has been below the 2 percent target since last January.

But, wages declined for the first time since 2009 and the unemployment rate hit the lowest since 2008. During the three months to June, pay including bonuses for employees was 0.2 percent lower than a year earlier. The ILO jobless rate fell to 6.4 percent during the same period.

BoE estimates wage growth of 1.25 percent on average this year and inflation to be around 1.8 percent in two years' time.

Last month, Carney said interest rates will not rise soon as wage growth remain subdued and the economy faces challenges from the external environment.

source

 

U.K. Job Vacancies At 16 Year High In Aug

Job vacancies in the U.K. grew at the sharpest rate in more than 16 years in August, results of a survey by Markit Economics on behalf of the Recruitment & Employment Confederation, or REC, and KPMG showed Friday.

The number of available job vacancies rose at a faster pace in August and the growth rate was strongest since April 1998.

Private sector and public sector job vacancies increased in August, with private sector demand rising sharply.

Total vacancies increased the most in the engineering sector while the least growth was noted in the hotel and catering industry.

Increased vacancies led to strong growth in staff appointments but the rate of increase eased from the previous month's five-month high.

Among the regions surveyed, placements improved the most in the South region.

Permanent employee salaries continued to rise at an accelerated pace in August and the growth rate was only slightly slower than the record-high rate in June. Also, temporary pay increased at a faster rate in August.

Meanwhile, the number of available candidates to fill job vacancies declined further. Particularly, the availability of permanent candidates recorded a steep decrease, although the rate of decline was slightly less than July's series-record rate.

Kevin Green, REC CEO, said, "As skills shortages increase and employers struggle to find the people they need, politicians from all parties should focus on ensuring that we have a visa and immigration regime that supports UK businesses."

"Just when it seemed the UK's economy had definitely turned a corner, a couple of warning shots have been fired," Bernard Brown, partner and head of business services at KPMG, said.

He also commented that the desperation of employers to find the right staff is leading to continuous wage growth that is both unsustainable and unrealistic.

source

 

Nearly Half Of Britons Expect Interest Rates To Rise In 1 Year: Survey

Nearly half of Britons surveyed by the Bank of England expect an interest rate hike in the next 12 months, the strongest outcome in more than three years.

The Bank of England/GfK NOP Inflation Attitudes Survey for August, released Friday, revealed that 49 percent of respondents expected the central bank to hike its record low interest rate over the next 12 months.

That was the highest ratio since the 55 percent logged in May 2011. In May this year, the share of those expecting a rate hike in a year was 42 percent.

The survey, held between August 7 and 15 among 2016 people, showed that the expected rate of inflation over the coming year was 2.8 percent versus 2.6 percent in May. Inflation expectations for two years climbed to 2.8 percent from 2.5 percent and the five-year expected figure rose to 3.4 percent from 2.9 percent.

Half of those surveyed found the Bank of England's 2 percent inflation target 'about right'. The ratio dropped from 53 percent in May. The survey also showed that public confidence regarding the central bank was broadly unchanged with the balance at +30 percent in August versus +31 percent in May.

Twenty percent of those survey felt higher interest rates would be 'best for the economy', unchanged from May.

Yesterday, the Bank of England left its key interest rate unchanged at 0.50 percent once again at its two-day monetary policy meeting after policymakers split on the decision last month for the first time since mid 2011.

source

 

GBP/USD forecast for the week of September 8, 2014

The GBP/USD pair broke down during the course of the week, slicing through the 1.65 handle. With that, we believe that the market is probably going to head to the 1.60 level, but we feel that bounces could come from time to time. At the end of the day though, it appears of this market is ready to go lower, so therefore we are only interested in selling. We have no interest in buying until we get above the 1.66 handle, something that we do not anticipate seeing.

source

 

Supporters of Scottish independence take narrow poll lead for first time

(Reuters) - Supporters of Scottish independence have taken their first opinion poll lead since the referendum campaign began, which indicates a real possibility that they might win, according to a YouGov survey for the Sunday Times newspaper.

With less than two weeks to go before the Sept. 18 vote, the poll puts the "Yes" to independence campaign on 51 percent against the unionists on 49 percent, overturning a 22-point lead for the unionist campaign in just a month, the Sunday Times said.

The paper announced the headline results in a news release ahead of publication but gave no further details of the poll.

YouGov later said on its website that the results excluded those who would not vote and those who do not yet know. With those groups included, secessionists would be on 47 percent and unionists would be on 45 percent, it added.

It said that the poll, conducted after pro-independence leader Alex Salmond was widely judged to have won the second of two televised debates, amounts to a statistical dead heat at the moment.

"The last poll ... was the first to represent a real possibility for a "yes" win ...," it added in a preliminary statement which gave no further details of the survey.

After months of surveys showing nationalists heading for defeat, recent polls have been showing the gap narrowing to the extent that they raise the real prospect that secessionists led by Salmond's Scottish National Party (SNP) could achieve their goal of breaking the 307-year-old union with England.

read more

 

Pound in Peril as Opinion Poll Puts Scottish Separatists Ahead

Sterling markets are stirring on the risk of the U.K.’s 307-year-old union splintering, and that spells danger for the pound.

Britain’s currency is likely to weaken when markets resume trading after the weekend, strategists said following a poll that showed the Scottish independence campaign gained a lead for the first time this year with two weeks left before the vote. The pound fell the most in 14 months last week, and gauges of future price swings surged after the previous YouGov Plc showed the “No” campaign’s lead was shrinking.

“The referendum is on a knife edge,” said Nick Stamenkovic, an Edinburgh-based fixed-income strategist at broker RIA Capital Markets Ltd. “Markets have been too complacent but are now waking up to the increased risk of Scotland voting for independence.”

The question of whether a go-it-alone Scotland will be able to keep the pound in partnership with the remaining parts of the U.K. has dominated the independence debate with all the major parties in London saying they would oppose it. Scottish First Minister Alex Salmond has argued they would change their view once negotiations began in the event of a vote favoring independence and has said Scotland would refuse to pay its share of the U.K. national debt if they didn’t give in.

read more

1...67891011121314151617181920...117
New comment