The Great Debate UK

A tough spring in store for the pound

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foley- Jane Foley is research director at Forex.com. The opinions expressed are her own.-

The pound has started the year on a negative note.  Ongoing concerns over the budget deficit, an impending general election, the prospect that the Bank of England (BoE) may yet increase quantitative easing (QE) and a drop in consumer confidence are all clouding the outlook.

That said, sterling has already paid a high price for its weak fundamentals.  In 2009 EUR/GBP averaged 0.8909, this is 17 percent higher than its average in the 12 months leading to the Northern Rock crisis and 35 percent above the average rate between 2000-07.

A lot of bad news is in the price but a sustained sterling recovery is unlikely until there are concrete signs of resolution to the UK’s deficit problem.

Why we need a bond market crisis

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copelandLaurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -

The spirit of Britain’s Christmas is looking disconsolate this morning. Santa Claus has failed to deliver what our democracy most needed. No, not a deal to let the French have the 2012 Olympics in exchange for a bottle of Beaujolais Nouveau.  Nor the nomination of Tony Blair for the Nobel Peace Prize. Number one on this year’s wish list was something more realistic, and maybe far closer:  a gilt market crisis.

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