Pound Sterling drops after weak growth data

The British pound also experienced increased resistance on Monday after the first quarter of UK economic data was worse than previously expected. There are many indications now that the recession been worse than expected and economic growth lower then earlier estimated.

UK inflation way over target level

The country’s inflation in recent months is now 3.7%, significantly above the Bank of Englands target level of 2%. Britain could be forced to raise interest rates relatively soon, as MPC member Andrew Sentance already voted for. But Mr. Archer at the Bank of England believes inflation is on a downward trend and believe rates will be kept at 0.5% throughout 2010 and well into in 2011. How credible is the new government and how well will they keep Britain’s a currency? If the BOE will not to curb inflation in the near future you can expect the British pound to decrease significantly.

When do you think Britain will raise interest rates?

• No Related Post