British Pound (GBP) Exchange Rate Today: UK Construction Output Reaches 5.3%
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Conversely the Pound to Euro (EUR) exchange rate remained within the 1.2577 and 1.2604 boundaries.
The Pound was subject to influence from the Bank of England on Thursday after they announced the decision to maintain interest rates at their current low of 0.50%.
However, the real fluctuation is likely to appear in several weeks after the meeting minutes are released which will show the vote rate in favour for and against the hikes.
The UK economy has performed poorly in latter weeks with regards to data publishing, consecutively after a string of highly favourable figures, which had formerly caused the speculation surrounding interest rates hikes to heat up.
Furthermore, most who believe hikes will happen in 2014, believe they will take place in the last quarter of 2014.
This is in contrast to others who speculate that 2015 is more feasible for the UK economy to withstand interest rate rises.
Former Monetary Policy Committee [MPC] member Andrew Sentance suggests that there is likely a split between members as he contests that interest rates should be materialising by this point.
Sentance stated: ‘We should really have had the first rate rise by now. The danger is getting behind the curve. You would have to raise them more sharply than the MPC would ideally like, and deliver a bigger shock to economy.’
Alternatively, another former MPC board member Sushil Wadhwani disagrees, suggesting instead that the Bank of England needs to wait in order to make the interest rate decision most effective.
Wadhwani stated: ‘It pays to wait and at least see some tangible signs that wages are picking up. If you raise rates prematurely and abort a recovery, the costs associated with that, having taken so long to establish one, are much higher than the costs of waiting just a little bit.’
The Pound will see influence today by way of Construction Output figures which are forecast to reach 4.7% in June, alongside the Total Trade Balance statistics for June.
The Trade Balance deficit is expected to shrink in comparison to May’s -£2418, at only -£2050, whilst trade balance figures beyond the EU are predicted to reach -£3700 in June, in comparison to May’s -£3961.
Next week however will prove to be highly significant for the Pound with Gross Domestic Product (GDP) figures published which will be used to analyse UK inflation levels.
If the UK economy performs well in its economic expansion, the Pound could climb against other majors in an indication that the UK economy is still strengthening, despite some data mishaps of late.
Friday has seen the release of Positive Construction Output figures which have attained 5.3% in June year-on-year, bypassing the economists’ forecasts of 4.7%.
Conversely UK Trade Balance figures disappointed. The Total Trade Balance fell beyond the -£2050 forecast, instead falling further into deficit at -£2459 showing Britain’s imports are reaching higher numbers than exports.
Furthermore the Trade Balance None EU which covers all Britain’s trading beyond the EU confines, also reached negative figures at -9413, bypassing the -£8900 prediction.
The Pound looks set to remain in a volatile state until the UK figures are able to perform consistently once again.
The GBP to USD exchange rate presently resides at 1.6804.