UK Unemployment Falls

Some positive news for the UK came out with figures showing that unemployment had fallen to 2.5 million which is a drop of 14,000 people. This is certainly positive news for the UK and in fact we have seen Sterling Euro exchange rates push up by close to a cent compared to the lows seen yesterday. However, while this figure is an improvement it is still a worryingly high number of people out of work and indicates what a precarious position both the UK economy and GBP is in – the fact that the Pound has strengthened despite our unemployment being close to some of the largest figures in recent history highlights this! While the spike in the Pound exchange rates is positive I am still concerned that this dip in unemployment is just that; a dip and with the recent failures of some of the UK High Street’s largest retailers we will see the unemployment rate rise again and so any gains we have made for Sterling could soon be lost.

Will The US Stop Quantitative Easing?

Last night the minutes from the recent FED meeting showed that the Central Bank had discussed stopping its monetary stimulus package as they believed the monthly payments could be increasing the risks fo future economic and financial imbalances. Considering the Fed are buying $85bn worth of bonds per month their statement about imbalance could well be right. While some analysts believe that spending to help an economy get out of trouble is a good way to proceed this huge level of expenditure could mean that the constant supply of money into the economy could lead to a significant increase in inflation and while people still struggle to afford goods and services at the current levels and with high unemployment and no sign of wage increases rising inflation could make living very difficult. So, slowing or stopping monetary easing could help reduce the threat of spiralling inflation and in the medium term help the US economy which in turn could help the global economy.

In Other News

With an increase in the talk of an independent Scotland last night it was suggested that should Scotland get their independence they should create their own currency. The idea of Scotland having their own monetary union and monetary policy would mean that they could set their own policies in order to help their economy rather than having to rely on the Bank of England. However, despite this Scottish independence and their own currency is still some time away but you can be assured we will keep you informed of any developments.

So, if you need to send money abroad then make sure you speak to us at Foreign Currency Direct plc by calling us on 01494 849752 or email me directly on