UK Economy Growing – GBP Strength
It was confirmed yesterday, as expected, that the UK economy grew at the fastest pace since the financial crisis hit back in 2007 which was yet more good news for the UK government, the economy and therefore Sterling exchange rates. As the positive news was expected it had little impact on the currency markets and Sterling held reasonably steady, still at very strong levels against the EUR, USD, AUD, NZD and many other of the major currencies. Unsurprisingly Chancellor George Osborne was quick to highlight the positive news but did also say that the job is not yet done. Mr Osborne claims that there is still a lot of work and difficult decisions to be made to ensure the recovery continues and the UK gets back to full economic strength. However at the same time Labour were questioning when this economic recovery would be felt by UK residents as they claim living standards and wages are not rising in line with inflation which is still meaning the general public are feeling the pinch. Regardless of this it is still more good news for GBP exchange rates and adds to the belief that we could see the Pound continue to strengthen this year as long as this positivity continues.
UK House Prices Rise
It was confirmed that UK house prices have risen by 0.7% in January according to the Nationwide. UK house prices have been under the microscope recently as there is concern that the cost of properties is rising too fast and creating another housing bubble. The worry is that should property prices continue to rise too quickly we may end up with people unable to afford to purchase properties and will eventually lead to a property crash and a repeat of what we saw back in 2008. So, while this news could be seen as positive for the economy and Sterling it could also add fuel to the fire that more needs to be done in terms of keeping prices under check.
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