The Pound has fallen further this morning in the aftermath of The UK’s government bond yields rising to their highest levels since 1998, as concerns deepen around the capability of to keep the debt under control.
Usually, a rise in bond yields, coupled with higher interest rates is deemed positive as it should lead directly to an uptick in Foreign funds and investment. But recently we’ve seen the markets react differently, which suggests markets are nervous about the path moving forward and how the levels of debt are navigated. Although rising bonds seems to be a global problem right now, what sets The UK apart in a concerning fashion is the fact that The UK is struggling to bring Inflation down to the central bank’s target of 2%.
Keeping with the UK, we have Retail Sales for July set to be released, and these figures could bring more doom and gloom for Sterling. The release is set to show a decline in sales by over half a percent, which no doubt will provide another headache for the Bank of England because the economy ultimately needs an interest rate cut, but with inflation stubbornly high it’s proving difficult to justify a rate cut.
GBP/EUR 1.1486 GBP/USD 1.3400 GBP/AED 4.9245
GBP/AUD 2.0523 GBP/CHF 1.0763 GBP/CAD 1.8491
GBP/NZD 2.2860 EUR/USD 1.1651 GBP/ZAR 23.6130