- Posted by Shyam Gokani in Bank of England, Brexit, Currency, Dollar, EUR, Sterling, UK, Uncategorised
- February 9, 2017
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Sterling traded at its highest in a week today after some more upbeat British housing data helped soothe nerves over economic growth and the government eased past parliamentary roadblocks to its plan to trigger talks on leaving the EU next month.
The pound has been rocked by a handful of weaker signals on the economy over the past week, hinting that consumers are finally beginning to feel the pain generated by an almost 20 percent fall in the currency that should push domestic prices higher.
Sterling won’t come under much pressure until we see clearer signs of the effect of falling real wages on consumer spending.
This morning’s RICS house price data was above expectations, and the next significant data come from tomorrow’s trade and manufacturing production.
The UK economy surprised investors last year when it outpaced its peers among the world’s big rich nations, driven by the spending of households who shrugged off the vote to leave the European Union.
But the results of a regular Bank of England survey on Wednesday showed British employers plan to offer the least generous pay deals since 2012 this year.
A number of major banks are still calling for the pound to fall by up to another 10 percent in the months ahead as the Brexit process develops, but it has resisted any push below $1.20 since the start of November.