The Pound Is Strengthening

[thaimate]

IT looks as if interest rates are going to rise in Britain sooner than expected owing to the runaway inflation there ,so does that mean a double whammy? more interest on our money and a higher exchange rate in the coming year?

[gotlost]

48.05 gbp/ 30.12 usd/ 40.32 eur/

[nong38]

I like what you say but I would whisper it the B O E will be very reluctant to raise interest rates in the first half of the year, under normal circumstances the rates would have already gone up but they scared to touch them incase the fragile economy collapses, they will bear the inflation( 3.7% in december almost double what they would like). I would say in the long term it looks better but in the meantime, dont hold your breath its going to take some time. If I am wrong I will be delighted, maybe we can get to 50 by the mid year, we would settle for that I think.

[12DrinkMore]

Mervyn is coming under some recent criticism for his failure to keep the inflation rate under control.

Don't forget he has two responsibilities. One is the rate of inflation, and the other is to maintain the stability of the financial system. He has been solely concentrating on the latter, in fact, a chunk of inflation will, indeed, help him with this.

The UK banks are currently able to maintain their ratios by borrowing from Merv at almost zero percent. What he does not want is a sudden drop in asset prices, private and commercial properties, the stock market and UK government bonds, which would trigger off another dose of bail-outs. That would be the dreaded deflation, that Ben and Merv are wetting their pants over. "It cannot happen here" as there is always another lever to pull letting off another dose of QE.

Even if Merv decided to raise interest rates a tad, this will be against a background of Asia raising interest rates from the current abnormally low level. I think that the Asian central banks would now like to raise interest rates somewhat higher to curb inflation, but are scared about the effect of attracting even more foreign currency flowing in, causing the currencies to appreciate too fast.

IMO the general trend has to be GBP gradually falling against Asian currencies, due to the imbalance in trade and the sheer amount of debt and liabilities weighing over the UK. But forex is, as Greenspan maintained, impossible to foresee.

[el jefe]

Inflation is never a good thing, even if it leads to higher interest rates. Over time it erodes the value of your savings and it's doubtful your income will keep up. And if interest rates don't go up, then you really have a double whammy -- low interest and higher prices.

[rgs2001uk]

Inflation is never a good thing, even if it leads to higher interest rates. Over time it erodes the value of your savings and it's doubtful your income will keep up. And if interest rates don't go up, then you really have a double whammy -- low interest and higher prices.

Personally I would rather have higher interest rates and higher prices than zero interest rates and higher prices.

Value of my savings, tell that to the BOE, crap interest rates and inflation, lets sort out the wheat from the chaff, get interest rates up to 10 or 12%.

[inthepink]

Inflation is never a good thing, even if it leads to higher interest rates. Over time it erodes the value of your savings and it's doubtful your income will keep up. And if interest rates don't go up, then you really have a double whammy -- low interest and higher prices.

Personally I would rather have higher interest rates and higher prices than zero interest rates and higher prices.

Value of my savings, tell that to the BOE, crap interest rates and inflation, lets sort out the wheat from the chaff, get interest rates up to 10 or 12%.

That would be the quickest way to destroy the recovery and, ultimately, the value of your savings when trying to spend them in Thailand for sure.

[JimsKnight]

Inflation is never a good thing, even if it leads to higher interest rates. Over time it erodes the value of your savings and it's doubtful your income will keep up. And if interest rates don't go up, then you really have a double whammy -- low interest and higher prices.

Personally I would rather have higher interest rates and higher prices than zero interest rates and higher prices.

Value of my savings, tell that to the BOE, crap interest rates and inflation, lets sort out the wheat from the chaff, get interest rates up to 10 or 12%.

That would be the quickest way to destroy the recovery and, ultimately, the value of your savings when trying to spend them in Thailand for sure.

No it wouldn't, just make sure you've savings to ride the waves

[a99az]

Death throws of a nation, more like.

[thaimate]

Death throws of a nation, more like.

What America? does seem that way.

[billd766]

Shhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

Don't tell anybody.

Just enjoy it while it is here.

[skybluestu]

Just noticed the (once) great british pound now gets over 49 compared to around 46 just a few weeks ago, is there a reason for this sudden increase and is it likely to continue?

[bartender100]

Just noticed the (once) great british pound now gets over 49 compared to around 46 just a few weeks ago, is there a reason for this sudden increase and is it likely to continue?

Because the idiots are no longer running the Economy

[Ricardo]

It's not just the Pound, which www.xe.com says is up to 48.9505, but also the UD$ at 31.0048, and Euro at 42.1547.

Something's happening, not sure quite what it might be, is someone planning a coup in the next 24-48 hours ?

[Naam]

Something's happening...

partly because foreign money pulls out of the SET, minus 6% in four trading days.

[Englander]

Just noticed the (once) great british pound now gets over 49 compared to around 46 just a few weeks ago, is there a reason for this sudden increase and is it likely to continue?

Because the idiots are no longer running the Economy

I'll grant that theyve not been in charge long, but theyre continuing with business growth stifling legislation, they were party to QE and 0% interest rates ie more easy debt to solve the debt problem. And theyve just borrowed 17 billion in the last month, ie cuts havent gone far enough in the economy where the government employs a majority.

The only reason the pound is rising is because the markets think theyll raise interest rate to 1.5-2% this year as inflation is dictating this, nothing to do with any recovery

Edited January 25, 2011 by Englander

[MJP]

That 'shock' inflation figure and corresponding expectation of rising interest rates may have caused a brief tick upwards, but if the BoE doesn't raise rates by February the Pound is toast.

. . . and they won't . .

. . . not on this news.

Heavy selling of the Pound today.

Edited January 25, 2011 by MJP

[Forkinhades]

It is about to fall again with the announcement that GDP was down 0.5% the last 3 months, double dip here we go.........

[MJP]

It is about to fall again with the announcement that GDP was down 0.5% the last 3 months, double dip here we go.........

Also, Quantitative Easing II soon to set sail. Here she is in all her glory.

On a more positive note, manufacturing is showing signs of resurgence.

A trashed Pound is exactly what is needed to rebalance that economy away from government and 'services' whatever they are. A trashed Pound will act as a natural protectionism without import duties and other direct mercantilism which may offend some Asian governments that have been doing it to the UK for years but hold all our debt.

Trash the Pound! You know it makes sense.

Edited January 25, 2011 by MJP

[JimsKnight]

It is about to fall again with the announcement that GDP was down 0.5% the last 3 months, double dip here we go.........

Also, Quantitative Easing II soon to set sail. Here she is in all her glory.

On a more positive note, manufacturing is showing signs of resurgence.

A trashed Pound is exactly what is needed to rebalance that economy away from government and 'services' whatever they are. A trashed Pound will act as a natural protectionism without import duties and other direct mercantilism which may offend some Asian governments that have been doing it to the UK for years but hold all our debt.

Trash the Pound! You know it makes sense.

Are you kidding me?

The economy was doing fine before 2008 and the credit crunch bs.

Mining is my gig and that's trashed enough thank you very much!

I'm all for protectionism (we need a leaf out of LOS' book) but not by trashing the pound. Can you say 'Forced to join the Euro' with a smile on your face? I sure can't!

[Englander]

Are you kidding me?

The economy was doing fine before 2008 and the credit crunch bs.

You mean credit was flowing fine until 2008 when people were asked to pay it back.

[phutoie2]

I noticed the pound last week was reaching highs against other major currencies that we haven't seen in some time. So I bet myself a bottle of Leo that within a week some figures from our masters would be released to slap sterling back down again, as has been the clockwork-like habit recently

And hey presto, today's GDP figures. Pound gets trashed, inflation goes up. No surprise there, move on!

[MAJIC]

Dont hold your breath on a large rise in GBP to Baht exchange rate,after all it is a Seasonal Adjustment.

Right now we are coming to the end of the Thai Peak Holiday season,and as usual the Pound seems to strengthen,but in fact,there is less revenue from Tourism,so less need for Baht Manipulation,by the BOT.

I dont see the slight rise in the £ to Baht exchange rate, as a sign that the British Government is doing much to overcome the UK financial difficulties with only one Policy,so im not surprised at the latest lack of recovery figures.

i.e.... Reduce Goverment Spending,especially for those unfortunates who have to live on Public Benefits.

Cut/ Cameron and Slash/ Clegg are aptly named,thats the sum total of their idea of a positive effect on long term recovery,......Cut & Slash and nothing but talk of penalising the greedy Banks,up to now.

Sigh, Its the same old story I have heard from Politicians all my life,the Big Guys F*** up and the little Guys pick up the checkbin.

Edited January 26, 2011 by MAJIC

[Englander]

Dont hold your breath on a large rise in GBP to Baht exchange rate,after all it is a Seasonal Adjustment.

Right now we are coming to the end of the Thai Peak Holiday season,and as usual the Pound seems to strengthen,but in fact,there is less revenue from Tourism,so less need for Baht Manipulation,by the BOT.

I dont see the slight rise in the £ to Baht exchange rate, as a sign that the British Government is doing much to overcome the UK financial difficulties with only one Policy,so im not surprised at the latest lack of recovery figures.

i.e.... Reduce Goverment Spending,especially for those unfortunates who have to live on Public Benefits.

Cut/ Cameron and Slash/ Clegg are aptly named,thats the sum total of their idea of a positive effect on long term recovery,......Cut & Slash and nothing but talk of penalising the greedy Banks,up to now.

Sigh, Its the same old story I have heard from Politicians all my life,the Big Guys F*** up and the little Guys pick up the checkbin.

Youre clearly a commie who thinks the govt should keep on spending money they havent got, this is not Cameron or Cleggs fault .. but just to keep you happy they spent 16billion pound in the last month that they havent got .. thatll keep the kids of today happy to know theyre paying for economic illiterate baby boomers to run after farmers girls.

[Ricardo]

Something's happening...

partly because foreign money pulls out of the SET, minus 6% in four trading days.

Thank-you Naam, as usual you're right, and I had spotted this, as a part of the cause. :jap:

My question is, why is some of the 'hot money' suddenly 'running for the wings', did they only now just wake up, and see the potential for political-unrest, in what's been widely-known to be an election-year, or what ?

[Naam]

My question is, why is some of the 'hot money' suddenly 'running for the wings', did they only now just wake up, and see the potential for political-unrest, in what's been widely-known to be an election-year, or what ?

Ricardo,

i think it's a combination of a whole range of factors but of course i have no idea which one dominates. quite obvious is the development at the SET. since the 2008 crisis and the blockade of Swampy, investors (domestic and foreign) have made a whopping 170% profit. on top of that most foreign investors added another ~20% (on the 170%) exchange rate profit. being an investor myself (in other asset classes than shares) i can quite well understand that one pockets >200% profit and looks for other pastures which have been "less grazed".

[MAJIC]

Dont hold your breath on a large rise in GBP to Baht exchange rate,after all it is a Seasonal Adjustment.

Right now we are coming to the end of the Thai Peak Holiday season,and as usual the Pound seems to strengthen,but in fact,there is less revenue from Tourism,so less need for Baht Manipulation,by the BOT.

I dont see the slight rise in the £ to Baht exchange rate, as a sign that the British Government is doing much to overcome the UK financial difficulties with only one Policy,so im not surprised at the latest lack of recovery figures.

i.e.... Reduce Goverment Spending,especially for those unfortunates who have to live on Public Benefits.

Cut/ Cameron and Slash/ Clegg are aptly named,thats the sum total of their idea of a positive effect on long term recovery,......Cut & Slash and nothing but talk of penalising the greedy Banks,up to now.

Sigh, Its the same old story I have heard from Politicians all my life,the Big Guys F*** up and the little Guys pick up the checkbin.

Youre clearly a commie who thinks the govt should keep on spending money they havent got, this is not Cameron or Cleggs fault .. but just to keep you happy they spent 16billion pound in the last month that they havent got .. thatll keep the kids of today happy to know theyre paying for economic illiterate baby boomers to run after farmers girls.

Sorry to disappoint you,I have never been a "Commie" and never will be.

And if the Baby Boomers want to spend their hard earned Pensions running after Farmers girls,then its up to them,how they spend their money,.

After working 40 years plus,paying their Taxes and National Insurance, they owe the kids of today nothing.

Surely you don't begrudge them from having a little fun in their twilight years?

Edited January 26, 2011 by MAJIC

[Englander]

Dont hold your breath on a large rise in GBP to Baht exchange rate,after all it is a Seasonal Adjustment.

Right now we are coming to the end of the Thai Peak Holiday season,and as usual the Pound seems to strengthen,but in fact,there is less revenue from Tourism,so less need for Baht Manipulation,by the BOT.

I dont see the slight rise in the £ to Baht exchange rate, as a sign that the British Government is doing much to overcome the UK financial difficulties with only one Policy,so im not surprised at the latest lack of recovery figures.

i.e.... Reduce Goverment Spending,especially for those unfortunates who have to live on Public Benefits.

Cut/ Cameron and Slash/ Clegg are aptly named,thats the sum total of their idea of a positive effect on long term recovery,......Cut & Slash and nothing but talk of penalising the greedy Banks,up to now.

Sigh, Its the same old story I have heard from Politicians all my life,the Big Guys F*** up and the little Guys pick up the checkbin.

Youre clearly a commie who thinks the govt should keep on spending money they havent got, this is not Cameron or Cleggs fault .. but just to keep you happy they spent 16billion pound in the last month that they havent got .. thatll keep the kids of today happy to know theyre paying for economic illiterate baby boomers to run after farmers girls.

Sorry to disappoint you,I have never been a "Commie" and never will be.

And if the Baby Boomers want to spend their hard earned Pensions running after Farmers girls,then its up to them,how they spend their money,.

After working 40 years plus,paying their Taxes and National Insurance, they owe the kids of today nothing.

Surely you don't begrudge them from having a little fun in their twilight years?

If you think the govt should keep on spending money they havent got youre either a socialist of the worst order or economically illiterate.

But its those born after the 2nd WW that have had a trillion pound spent on their retirement that those leaving school now are going to pay for, your generation havent paid enough into the system as to what youre taking out. The profit on your property will be getting paid for by kids born today a nice scam set up by your generation.

[MJP]

Are you kidding me?

The economy was doing fine before 2008 and the credit crunch bs.

You mean credit was flowing fine until 2008 when people were asked to pay it back.

Quite.

The UK economy was numerically in tatters long before our current predicament. Probably trace it back to when the original pension ponzi schemes kicked off, but certainly post 1997 when the UK went from a brief period of running a surplus to the devastating deficits thereon in.

Just because Mrs Smith from 42, Arcacia Avenue suddenly had a dozen Buy To Let's on interest only mortgages and Mr. Jones from Pontypool MEW'd his already paid off semi to drive his 'dream' car and go on twenty seven 'dream' holidays . . . did not mean the economy was doing great.

Similar to smack heads on their way up . . .

[MAJIC]

Dont hold your breath on a large rise in GBP to Baht exchange rate,after all it is a Seasonal Adjustment.

Right now we are coming to the end of the Thai Peak Holiday season,and as usual the Pound seems to strengthen,but in fact,there is less revenue from Tourism,so less need for Baht Manipulation,by the BOT.

I dont see the slight rise in the £ to Baht exchange rate, as a sign that the British Government is doing much to overcome the UK financial difficulties with only one Policy,so im not surprised at the latest lack of recovery figures.

i.e.... Reduce Goverment Spending,especially for those unfortunates who have to live on Public Benefits.

Cut/ Cameron and Slash/ Clegg are aptly named,thats the sum total of their idea of a positive effect on long term recovery,......Cut & Slash and nothing but talk of penalising the greedy Banks,up to now.

Sigh, Its the same old story I have heard from Politicians all my life,the Big Guys F*** up and the little Guys pick up the checkbin.

Youre clearly a commie who thinks the govt should keep on spending money they havent got, this is not Cameron or Cleggs fault .. but just to keep you happy they spent 16billion pound in the last month that they havent got .. thatll keep the kids of today happy to know theyre paying for economic illiterate baby boomers to run after farmers girls.

Sorry to disappoint you,I have never been a "Commie" and never will be.

And if the Baby Boomers want to spend their hard earned Pensions running after Farmers girls,then its up to them,how they spend their money,.

After working 40 years plus,paying their Taxes and National Insurance, they owe the kids of today nothing.

Surely you don't begrudge them from having a little fun in their twilight years?

If you think the govt should keep on spending money they havent got youre either a socialist of the worst order or economically illiterate.

But its those born after the 2nd WW that have had a trillion pound spent on their retirement that those leaving school now are going to pay for, your generation havent paid enough into the system as to what youre taking out. The profit on your property will be getting paid for by kids born today a nice scam set up by your generation.

Well make your mind up!

First I was a "Communist ",now I'm a "Socialist"

Seems like your anger stems from probably having to pay for your own Private Pension, and seems like you don't own your own House.And no doubt you are too Young to contemplate all those years of hard work ahead of you.

Obvious you are a Typical Tory who has missed out on,making your fortune, and now is full of jealousy,for the Generations that worked hard,paid their dues,and now have their place in the Sun.

I say,Good Luck to them,maybe you can work as hard for all of your working life and join them one day. But I doubt you will ever get the point.

You seem to choose to forget too much in your viewpoints.

"We live in a Captialist Society"

1. The Generation you are talking about,paid into the Pension System,through NI Contributions (not to mention Taxes) so that the elder generation could have their comfortable Retirement, i.e the money got paid in,and the Pensioners drew their Pensions out, as set up,after the Second World War. Its not the Pensioners of todays fault that this may not continue,in its present form.

The original Pension Scheme was ill conceived in the first place, i.e money was paid in by those working,and Pensions were drawn out by those that were Retired,and with no Investment for long term growth. (most likely Criminal if a Private Company was to do the same today)

Our Generation was proud to pay for our Retirees Restful Years,and certainly,didn't whinge about it, we just did it!

2. The Capitalist system brought about ,high house prices, and the large increases over the years,with no control by the "Baby Boomer" Generation, so after a period of decades,struggling to pay a Mortgage,and not using cheaper Public Accomodation (Council Housing) years later,it was worth more than it was initially. All brought about by "Market Forces" (as Thatcher was so fond of quoting) Oh! and by the way,it was her vote buying that sold off most of our Council Housing stock,at a vastly reduced price,shrewd political move, eh?

So why blame people for Capitialising on their hard earned assets, what are they supposed to do? give the profits back to the (for the most part) feckless youth of today?

Now if you really want to have a whinge about something intrinsic to the Financial meltdown, try the Paper Shuffling Greedy Banking System.

Oh! can I be a Liberal in future?

Edited January 26, 2011 by MAJIC