Qualified advisers answering your
Financial Questions
call 0800 092 1245

Why is Mervyn King talking down the UK currency?

As we have covered over the last couple of days, Mervyn King, the Gov of the Bank of England, has been very active in talking down the value of sterling on the worldwide currency markets. Initially there were both positive and negative comments from the Bank of England but over the last 24 hours there is no doubt that Mervyn King has turned more negative on the UK currency than ever before.

At a time when the UK government, via the quantitative easing scheme, is pumping billions upon billions of pounds into the UK economy it seems very strange that the Bank of England would want to talk down the value of sterling. However, the lower that sterling falls the more attractive UK assets and goods become to foreign investors, which should in due course increase exports. Unfortunately the exact opposite is the case for imports with UK consumers set to pay a higher price for imported goods and imported services.

We can therefore assume that the Bank of England believes it is more beneficial in the short to medium term to have more foreign investors investing in the UK to try and give the economy a base from which to grow in the future. Time will tell whether this is in fact the right move.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details