UK Economy Downgraded Again

It was announced over the weekend that credit ratings agency Fitch has become the second organisation that has downgraded the UK economy as it followed in Moody’s footstep and lowered the UK’s credit rating to AA+ from its previously held triple A rating. This news comes after Standard and Poors confirmation that they were not going to downgrade the UK but would instead place the country on a negative outlook. The fact we have seen two credit ratings agencies downgrade the UK has heaped yet more pressure on George Osborne and the rest of the government. Last week Osborne’s austerity measures were being questioned by the IMF and other leading figures but the Coalition government and Osborne himself have defended the austerity measure vigourously stating they are keen to help the UK economy recover. However, as another credit rating agency downgrades the UK and as we move closer to the much anticipated Gross Domestic Product (GDP) figures there is a possibility that Osborne will face more pressure and if it is confirmed we are in recession then we really could see the UK and importantly Sterling weaken.

As more negative news is released it would not be surprising to see Sterling weaken against a number of major currencies and with this Thursday’s GDP figures looming the heat could soon be on Osborne and the government. If recession is confirmed and following the news from Fitch it would not be unthinkable to see Sterling Euro exchange rates drop down towards the 1.13 level while Sterling Dollar exchange rates could fall back down below the 1.50 mark. This means if you have a currency transfer to make whether you are buying or selling this week could be crucial so make sure you stay in close contact with one of our expert currency brokers here at Foreign Currency Direct plc.

This Weeks Economic Data

Today is a fairly quiet day for economic data releases with the main news being European Consumer Confidence which will be released at 3pm, however tomorrow we have UK Public Sector Net Borrowing which will show how much the UK government are borrowing, there is Canadian retail sales and then in the evening we have the Reserve Bank of New Zealand’s interest rate decision. On Wednesday we have UK mortgage approvals and then the big data release will be Thursdays GDP. Finally on Friday we have US GDP figures which could also give an indication into the strength (or not) of the US economy which may have more wide reaching implications.

So, with some key data out this week if you do need to transfer money abroad it could be key to stay in close contact with one of our friendly and experienced currency brokers here at Foreign Currency Direct plc. We can offer a number of different contract options all of which can be tailored to your individual requirements. To find out about these contracts and how we can help you make your currency transfer abroad efficient and straight forward call us today on 01494 849752 or alternatively you can email me on