Bank of England MPC member upsets currency markets

Kate Barker, a member of the monetary policy committee of the Bank of England, has this morning shaken up the currency markets with her comments at the weekend. Despite the fact that sterling has been under pressure for some time it had experienced something of a short-term rally towards the end of last week only to be hit again this morning amid suggestions the UK could see economic growth slow in 2010.

The very fact that Kate Barker suggested that GDP could move back into negative territory in one quarter of 2010 took many experts and investors by surprise. The truth is that no currency market investors need an excuse to sell sterling at the moment with ever-growing concerns regarding the UK budget deficit and national debt. While these comments may well have been well meant and honest, Kate Barker has taken centre stage at a time when the MPC would prefer to let its decisions grab the headlines.

Despite the fact that many people ended 2009 trying to talk up the UK economy, 2010 has begun in a very different vein with prominent economists, politicians and financiers questioning the strength of the current UK recovery and the prospects for 2010.