British Pound (GBP) Exchange Rate: Sterling Close to Four-Year high against the US Dollar
The British Pound is trading just off of a four-year high against the US Dollar as economists await the Bank of England’s monetary policy decision and as data showed that house price growth accelerated across the UK.
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According to Halifax’s latest survey, house prices in the country rose by an average 2.4% in February, meaning that prices are now 7.9% higher than last year. The rise was the fastest recorded since October 2007.
“Several factors appear to have boosted demand, such as the improved economic outlook, unemployment falling faster than expected, improvements in consumer confidence and low interest rates,” said Stephen Noakes from Halifax.
The data supported the nation’s economic recovery but did little to convince investors that the Bank of England will raise interest rates from the record low level of 0.5% at today’s policy meeting. Most economists are forecasting that the BoE will not make any changes to policy. As well as maintaining interest rates the Banks policy makers are expected to leave its £375 billion bond buying target unchanged.
Sterling found support yesterday from the release of a better-than-forecast services PMI report. The report said that jobs growth in the sector was just below the 17-year high recorded in January.
After the Institute of Supply Management declared its services purchasing managers’ index fell to a 43-month low of 51.6 last month from 54.0 in January, the US Dollar lost ground against its peers. Analysts had predicted the index to fall to 53.5 in February, so the announcement came as quite a surprise. Investors avoided the Dollar to await Friday’s February jobs report for a fresh clue over the influence rough winter weather may have had on the economy last month.