Will The UK Fall into Recession?
The British Chambers of Commerce (BCC) has released encouraging results from a survey conducted with over 7000 firms which led to positive news being bound around about the UK service and manufacturing sectors. There has also been a rise in UK house prices announced this weekend by Nationwide. The first time house prices have risen on annual terms since February 2012. Once the preliminary results for Quarter 1 Gross Domestic Product (GDP) figures are released later this month, we may see the Pound strengthen further against a Cyprus weakened Euro which is currently assisting UK exports. A long overdue and very welcome sweetner for UK business.
I believe it may be some time before we see the EUR make up significant ground on GBP. Although the doors to Cypriot banks are open again the daily Euro withdrawl cap is preventinga Northern Rock style run on the banks. This has allowed the Cypriot Government to discuss financial bailouts with the EU and the IMF in more depth and strength as Russia has announced that they do not wish to assist. This means this will could be longer until Cyprus will be out of the news and subsequently the EUR and Eurozone will siffer.
I believe the Euro will linger around the 1.18 levels for the coming weeks while the IMF and the European Union take control of the finances of the small Mediterranean Island. I also believe the EUR will eventually move back towards the 1.15 level against Sterling as issues in Cyprus finally resolve themselves. With this level of volatility and the Pound at a three month high (up 4.5% in 2 weeks) this current spike could be a good opportunity for clients looking to buy Euros.
If you would like to discuss your currency requirements then please call us today on 01494 849752 or alternatively email me on AJB@currencies.co.uk