UK Economy Update

The UK economy has enjoyed a relatively positive few days compared to last week, increasing the value of sterling. While last year saw concerns of further quantitive easing, market analysts now see any further QE in the foreseeable future as being unlikely. UK manufacturing data, whilst being lower than expected (down to 51.2, below forecasts of 51.8), was still positive enough to keep above the levels required for contraction and allowed the pound to maintain its strength against the ever weakening Euro.

The Euro saw some strength against sterling earlier on this week due to confidence about the Greek austerity measures, causing the rates for transferring sterling to euros to be the worst we’ve seen for several months. However, this confidence was short lived with the announcement that the European Central Bank would be pumping more money into the EU banking system, and the realisation that the austerity measures are, at best, a temporary solution for Greece’s economic woes. This had caused sterling to regain its losses against the euro, giving us the same excellent rates for transferring sterling into euros that we’ve seen for the past few months, hitting a 2 week high on Friday morning.

It should be important to note that it isn’t just the sterling profiting over the weakness of the Eurozone. Other European currencies, such as the Swiss Franc, have seen strength this week, helped by a stronger than expected Swiss economy, growing 1.3% in 2011, up from a projected growth of 0.9%. Despite this strength, the Franc remains weaker than both the Euro and Sterling, the pound seeing a burst of strength against the Franc over the last 24 hours, giving us very strong rates for anyone looking to send money to Swizerland. Another currency that has seen weakness against sterling this week is the Turkish Lira, which has seen a small decrease in value this week due to rising oil prices, causing the central bank to ease liquidity. This is likely to give people strong rates for transferring money to Turkey.

 Sterling saw a continuation of last week’s strength against the US dollar, hitting a 3 ½ month high against the American currency earlier this week, mostly caused by dollar weakness influenced by the euro’s brief resurgence at the start of the week. This has shrunk, over the past two days, however due to confidence in the dollar caused by record strength against the Yen. The Euro has also seen weakness against the dollar, falling away from a 3 month high, again due to the ECB decision to pump more money into the banks. Despite this, rates for transferring sterling into dollars remain strong, and analysts predict that we may see further strength

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