UK Economy Expected to Grow in 2014
In a prediction by the Ernst & Youngs Item Club it has been stated that the UK could start to grow at a much faster pace in 2014. The Item club believed that economic growth in the UK would hit 1.1% this year doubling up to 2.2% in 2014 thanks to an increase in consumer spending and a stronger housing market. Recently we have seen some stronger economic figures for the UK which has helped Sterling exchange rates and has helped confidence return to the UK however the improvements have by no means been significant enough for anyone to consider we are out of the woods just yet. However, should the recent run of strong data continues we could well witness a resurgence of the Pound however it will take quite some time and a change in attitude of the UK’s Central Bank the Bank of England (BoE) before we see rates push back up to the high levels we saw at the very start of the year.
The new BoE governor, Mark Carney, has stated that interest rates need to remain low for quite some time in order to help sustain the UK recovery and on top of this there is still a strong chance we could see the BoE introduce further rounds of Quantitative Easing (QE) which, due to increasing the supply of money in the economy can weaken Sterling exchange rates. While interest rates remaining low can be good for keeping inflation (currenlt running well over target) in check, they can also keep Sterling exchange rates low; good news for exporters but not a lot so good for clients looking to transfer funds internationally. There is little solace for those clients that the current economic conditions will eventually help the UK economy and Sterling exchange rates because it is likely to mean that in the short to medium term it is unlikely that exchange rates will improve significantly.
If you need to transfer money internationally and you would like to discuss your currency requirements and the different options available to you then speak with one of our senior currency brokers who will be happy to help. Our well trained team can give you the latest currency news and their opinions helping you make an informed decision on when to send your money abroad. Call us on 01494 725353 or alternatively email me on email@example.com.
US Retail Sales Still Growing
Figures from the States today have shown that US retail sales are still growing albeit at a slower pace than had been predicted. This news has led to some analysts stating that it is less likely that the FED will have to delay tapering down their Quantitative Easing (QE) programme in order to avoid damaging the economies recovery. Should we continue to see weak US economic figures the tapering of QE is likely to be delayed further and so we may see the US Dollar remain strong for the forseable future, however should the FED decide they can stop their QE programme then we may see Sterling Dollar exchange rates push back up. Currently the Dollar is very strong and is close to breaking down below the 1.50 level which could then result in some further USD movement lower.
To find out more about the current USD exchange rates speak with one of our friendly currency brokers today on 0800 328 5884.