U.K Economy Going Lower
Written by A Forex View From Afar on Thursday, July 10, 2008Back to www.thelfb-forex.com
The Bank of England faces a pretty hard situation: a stalling economy and a high degree of inflation. More and more economic releases point out a major slowdown, if not contraction, is coming.
House prices fell the most since 1993, consumer confidence hit an 18-year low, while the service, manufacturing and especially the construction parts of the economy are contracting at an increasing speed. The only indicator that is holding tight is retail sales, which easily beat estimates, but now everyone expects a major revision from it. All of this points to the UK central bank iprobably following the Fed’s footsteps in the next months.
A cut may be on the table and will probably start to be seen soon in the pound’s market valuation. Who knows, maybe the BoE will even open its own “mergers and acquisitions” department, as the Fed did. This may be the ultimate sell the rumor, and buy the news, of a U.K. rate cut.
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