UK GDP Still Negative – Is The UK Heading Towards Recession?

The revised Gross Domestic Product (GDP) figures were released this morning and have confirmed they are unchanged at -0.3% which is another signal that the chance of a triple dip recession remains. There was some hope that the figure would be revised up but this has not happened and now means that one more negative quarter of growth and the UK will be back in official recession. The fact that the UK has had its credit rating downgraded and is possibly on course for recession means the Pound is not currently a very attractive prospect for investors. As a result of this I think it is unlikely that we will see more money coming into the UK and instead we could see Sterling weakness. This could present some excellent opportunities for those clients looking to sell Euros or sell Dollars but for those clients looking to buy Euros or Dollars then it could be crucial that you speak to one of our expert currency brokers who will be able to discuss your requirements and therefore the options available to you.

Could We Seet Negative Interest Rates in The UK?

Yesterday we heard from the Deputy Governor of the Bank of England Paul Tucker who suggested that negative interest rates in the UK should not be ruled out. Mr Tucker was speaking to MP’s and stated that while it would be extraodinary if carefully thought through it could help boost the economy. The idea of negative exchange rates means anyone, whether it is an individual or an organisation which is holding money in the bank would be charged on those funds every month instead of receiveing interest on their money. This could help the economy as it means people are less likely to want to leave money in the bank and so instead could be more inclined to spend money resulting in more funds moving around the economy. The other benefit to the economy of this idea would be that the banks would be earning more income from charging people for the money they hold rather than paying out commission and as long as the banks then made sure this new income was lent back out into the economy it could again see more money moving through the economy. However, this could spark a mass outcry and public unrest and also result on a run on the banks as I cannot imagine that people will be happy being charged for keeping their funds with the banks. This could have a seriously negative effect.

The banks have been under serious scrutiny over the last few years and with the current suggestions that the Bank of England and other leading political figures are talking the Pound down to help UK exports and therefore the UK economy so it is possible that this suggestion is again further evidence of trying to prevent Sterling strengthening too far. The short term spike by Sterling we have seen over the last couple of days has been curtailed and this just shows that the hopes of the Pound getting back up the 1.20 mark against the Euro or 1.60 against the Dollar is unlikely in the short term.

So, if you need to send money abroad and would like to discuss the options available to you then speak to one of our experienced currency brokers today. You can call straight through to the trading floor on 01494 849752 or alternatively you can email me on