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Not very positive for GBP

Not very positive for GBP

Hopes for an economic revival took a major setback yesterday as activity in the manufacturing sector slumped to levels last seen during the recession, mortgage approvals crashed to a record low for April and Britain was officially declared one of the gloomiest nations in the world. What a day!

The manufacturing PMI index fell more sharply than expected last month from 54.4 to 52.1, having been a healthy 62 in only January – anything above 50 signals growth. The major worry for the UK government is that manufacturing, which up until now had been the one bright spot in the economy, now joins an already weak service and housing sector and signals a gloomy economic outlook.

In the UK housing market, there was more bad news as Bank of England data showed mortgage approvals hit their lowest level for April since records began in 1993. Analysts warned that house prices would fall still further, citing reducing disposable incomes as the major factor.

Reflecting these strained times, only one in 10 Britons polled by Mori rated the economy as “good”, making Britain one of the most negative countries in the world just above debt laden Spain and crisis hit Japan. Now speaking as an individual whose considers himself an optimist this raft of bad news has even me questioning where the UK economy is heading.

Weak manufacturing data was also released yesterday in the US, China and the Euro area heightening fears of a global slowdown, As if you hadn’t already heard enough bad news. The euro zone manufacturing PMI fell from 58 to 54.6 and even the mighty German manufacturing industry weakened, with manufacturing PMI falling from 62 to 57.7.

What does this all mean for the currency markets? Well, Sterling fell against the Dollar to 1.6346 and Euro to 1.1342, with traders contemplating no interest rate rise until Q1 next year on the back of the weak economic data.

For those interested in the Euro keep an eye out for news of the Greek bailout talks, with an announcement expected before this weekend. If an agreement is reached it has the potential to strengthen the Euro and conversely if no agreement is made there is a downside risk.

What does this all mean for me? Well buying your EUR, USD, AUD or any other currency at the wrong time could cost you a fortune. There is no crystal ball but Currency UK can give you the information you need to make an informed decision.

Currency UK will then offer you the best exchange rates available and ensure that you subsequent international transfers are handled as quickly and as efficiently as possible.

Contact us now on +44 (0)20 7738 0777 or click here.

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