UK Borrowing Falls – GBP Exchange Rates

It was confirmed yesterday in figures that are sure to please the Government that UK borrowing fell by ¬£1bn from the same period last month. However, despite this the UK’s net public debt as a percentage of our GDP is 75.9% which remains one of the highest in Europe. The Conservatives have stated that reducing the countries debt is one of their main focusses and in fact Chancellor George Osborne said that if re-elected they would aim to completely¬†wipe out the deficit by 2020. While the UK economic picture does seem brighter I find it hard to see how the Government will be able to completely wipe out the countries debt which currently stands as a total of ¬£1.21 trillion! Still, from a currency point of view even if the deficit is not completely wiped out any sort of reduction will be good for the economy and therefore for Sterling exchange rates. It will be interesting to see how this story develops, the Government have set themselves some lofty targets which may be designed for winning votes and popularity than actually being achievable targets but having a focus on this key area of the economy should only help the Pound in the long term. In the meantime Friday’s Gross Domestic Product (GDP) figures will bring yet more focus on the UK economy and will also highlight whether the UK has moved further away from the threat of recession.

To discuss the implications of the UK Public Sector Net Borrowing falling or the impending GDP figures call one of our knowledgeable currency brokers today on 0800 328 5884.

US Employment Figures – USD Exchange Rates

Yesterday we saw that 148,000 jobs were created in America during the month of September. The non-farm payroll data had been delayed due to the partial US Government shut down so this figure had been long awaited and although it showed the States created yet more jobs it was much lower than expected. With unemployment levels becoming a major factor for the US economy (this is also true for the UK) before the US start to taper down their current bond buying scheme (their equivalent of the UK’s Quantitative Easing) they are likely to need to see a reduction in the levels of unemployment, so the fact that unemployment fell from 7.3% to 7.2% it is still very high levels and will remain a concern for the FED. In the UK we have heard from the Bank of England that they will only amend interest rates when unemployment falls below 7% and while we do not have the same ‘forward guidance’ from America I would not be surprised if they have a similar target before they start reducing the amount of money they pump into the economy every month.

If you would like to get an update on the latest USD exchange rates then call us today on 01494 725353 or alternatively email me directly on trh@currencies.co.uk