When will the demise of sterling finally hit rock bottom?
As the UK currency continues to move lower and lower against the majority of the leading currencies of the world's there are serious concerns that we may be on the verge of a collapse in the UK pound. The currency is now at a 28 year low against a number of major currencies and with interest rates set to move lower in the short term there would appear to be little chance of a letup in the fall. So where does this leave the UK in the short term?
Rather perversely we may well see a number of foreign investors looking towards the UK in due course because many currencies have seen their spending power increase by over 30% against the UK pound. This may well assist in a recovery in the property market, increased overseas business investment and possibly the takeover of a number of UK operations. In many ways the UK is highly exposed to any offers from overseas investors with a government keen to try and refloat and strengthen the economy.
However, as we have covered on a number of occasions it is highly likely that if sterling continues at around current levels there will be an increase in import costs which could impact upon inflation and the cost of living.
Share this..
Related stories
How long will the retail bonanza last?
In spite of forecast that UK retail spending would come under pressure around the festive period and the New Year sales may not be as lucrative as many had hoped, the initial signs are that UK consumers are still shopping in record numbers. Unfortunately this cannot last forever due in the main to the fact that disposable income in the UK is still under pressure and a great number are still concer...
Read MoreInsolvencies up 8.5% in Q1
The number of insolvencies rose to 4,798 during the first quarter, as the credit crunch begun to impact on UK businesses. This figure is 374 more than in the preceding period and an increase of 124 on the final quarter of 2007. Furthermore, the increase of 8.5 per cent represents the first rise in 12 months, suggesting that the squeeze on credit in the financial markets is beginning to impact on t...
Read MoreWill the euro survive financial difficulties in the euro zone?
There is no doubt that the ongoing financial difficulties in Spain, Portugal and Greece are impacting upon the reputation and investment profile of the euro. While there are suggestions that the short-term fall in the value of the euro, against the dollar in particular, could slow as "short" positions are closed many feel that the end of the fall is not yet in sight. So what can the European Union...
Read MoreWhy are homeowners trimming their mortgages?
It has been revealed that homeowners in the UK paid off nearly £5 billion in mortgage debt in the third quarter of 2009. When you consider that mortgage rates are the lowest they have been for some time it does make you wonder why so many appear willing to increase their payments in the short term to reduce their mortgages? In a perfect world you would look to transfer your expensive debt to y...
Read MoreIs capitalism under threat?
As the UK government, the EC commission and various governments around the world continue to introduce new rules regarding the worldwide banking sector there is concern that capitalism and the free market are under threat. So is this the end of the free market or are we entering a new era and a new style of capitalism?
The truth is that governments and regulators round the world hav...