Wednesday, November 13, 2013

Sterling rebound after the inflation report

For the first time, you don’t have to be an optimist to see the glass as half full. The recovery has finally taken hold, the economy is growing at its fastest pace in 6 years and Inflation is now as low as it has been since 2009. Jobs are being created at a rate of 60,000 per month. 

The UK economy expanded by 0.8% in 2013 Q3 and business surveys point to continued robust growth in Q4. The gathering pace of expansion during 2013 was supported by an increase in domestic demand. That reflects both an improvement in credit conditions — for example, rates on new loans to households have fallen significantly over the past year — and a reduction in uncertainty. The easing of these headwinds has supported consumer spending and helped to revive the housing market: housing activity and prices increased and housing investment rose robustly in the first half of this year. Leading indicators suggest that housing activity is likely to strengthen further in the near term. 
Talking by numbers, Pound reached the level of 1.5879 as low before the inflation report with uncertain expectations about it. Just after the inflation report of BOE sterling hit the level of 1.6002 as day high, with more than 90 points movement during report releasing time.

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