UK Contraction in GDP causes a slide in the Pound

31st January 2011 – An unexpected contraction in UK GDP has caused a slide in the Pound during the past week.

Sterling plunged on Tuesday last week after a shock contraction in Q4 UK GDP. Britain’s economy shrank 0.5% in the last three months of 2010, confounding forecasts for a 0.5% expansion, with December’s heavy snow accounting for only part of the first contraction in five quarters. As the chart below shows, Sterling fell approx. 1.75% from 1.1720 to 1.1536:

The figures will be bad news for the government, which is due to start cutting public spending in early in 2011. They will also cast doubt over previous market expectations that the Bank of England will raise interest rates in the first half of the year. While last week’s GDP figures are backward-looking, they are nevertheless crucial to understanding the resilience of the economy to shocks. It seems that the economy is incredibly vulnerable and with the fiscal tightening yet to fully bite, we will have to brace ourselves for a bumpy ride.

Other economic figures last week showed that Britain’s public sector net borrowing rose from a year ago to its highest December reading on record and UK consumer confidence suffered an ‘astonishing collapse’ as Britons’ confidence in the economy and their finances witnessed its biggest drop in close to 20 years, raising fears that the Government’s austerity onslaught will set off a self-feeding downward spiral.

Graph Dec 2010 – January 2011

Despite all the doom and gloom Sterling did receive a brief lift after minutes from the Bank of England’s policy meeting showed policymakers considered an interest rate hike with (MPC) member Martin Weale unexpectedly joining Andrew Sentance in voting for a quarter-point rate rise. It’s important to note however that this meeting occurred a week before the Q4 GDP data the MPC members would have based their decisions on existing forecasts. Sterling reacted positively to this news albeit a little muted and recovered 0.75% of its losses to rise to 1.1637

An indirect and potentially future event risk came as Standard & Poor’s rating agency downgraded Japan for the first time in nine years, citing lack of a “coherent strategy” to control its monster budget deficit. The move is a reminder that sovereign debt woes continue to fester across much of the world and still pose a threat to the fragile global recovery; this may also be a reason behind the coalition government’s adherence to its austerity plan.

This past week’s events have highlighted the volatility still present in the Foreign Exchange markets and the need to remain in close contact with your currency broker to ensure the best possible chance of securing a favorable Exchange rate despite the circulating uncertainties. The coming week is a little lighter on economic data but no less important when safeguarding your currency needs.

If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open an exchange rate account today and an experienced trader will be in touch to discuss your requirement and offer expert market knowledge.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property Sales

Las Americas Apartments for Sale – Colon 1 – 2 Beds

Las Americas, Colon 1 – Refurbished 2 bed apartments for sale at €257,250.

Two newly refurbished apartments have just come onto the market on the Colon 1 complex in Las Americas, a rarity. Both are next to each other on the ground floor with private south facing terraces.

The apartments have two good sized bedrooms, a bathroom, generous lounge with open plan American style kitchen and good sized terraces with established planting. At the time these photos were taken the refurbishment was nearing completion. The refurb includes completely new tiling, doors, kitchens and bathrooms.

Colon 1 is well located smack in the middle of a busy hotel area with restaurants, bars and shops, yet it is a peaceful complex with well maintained attractive communal areas, very green with lots of grass and planting. Colon 1 is only 200 metres from a beautiful beach, it in the heart of Las Americas.

These apartments are both priced for a quick sale, real estate in this area is very valuable.

Visit our main web page to see all the photos of these Las America Apartments for sale.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Bargain 2 Bed Apartment for sale in Los Cristianos – €104000

La Montana, for sale – Bargain 2 bed apartment in Los Cristianos

“La Montana” is the mountain which roughly divides Los Cristianos and Las Americas behind Las Vistas beach. The building known as La Montana is located at the highest developed level so it has fantastic views down to the harbour and out to sea.

The apartment is in a modern building, generously sized with 72 square metres in all and two terraces. There are two good sized bedrooms, a modern bathroom, lounge area and a huge kitchen. It is a very bright and spacious Tenerife apartment.

La Montana is a quiet area, and the building is 250 metres from Las Vistas beach and the town centre.

This apartment is a real snip, even in the current market so view early because it is a beautiful apartment at a knockdown price. No Community Fees so running costs are very low.

Visit our main web page to see all the wonderful photos of this Bargain 2 Bed Apartment in Los Cristianos.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Dinastia Los Cristianos Bargain One Bed Apartments for Sale

On the Dinastia complex in Los Cristianos one bed apartments for sale.

We have two apartments on the popular Dinastia complex in Los Cristianos for sale. One in on the pool level with the terrace facing outwards and North west. The other one is on level 5 with the terrace overlooking the pool.

Both apartments have a hallway with doors to a large bedroom, with fitted wardrobes and a very generously sized bathroom. At the end of the hall is the lounge with a semi open plan well fitted kitchen. The terrace is accessed directly from the lounge.

Dinastia is well located with easy acess to al the amenities, bars, restaurants, shops and supermarkets. The Dinastia complex has a very nice communal pool with a popular pool bar.

Both of these apartments have be let out to produce an income, currently on long term let. Access available by appointment.

Prices are €127,950 for the upper apartment and €134,950 for the pool level apartment.

Visit our main web page to see all the photos of these Dinastia Apartments for sale.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Penthouse Apartment for sale El Mirador Los Cristianos

This penthouse is for sale on the El Mirador complex in Los Cristianos for €210,000.

It is on one of the most popular modern complexes in Los Cristianos, El Mirador, this apartment is well located with terraces looking outward and facing south west, this apartment has all day sunshine! The apartment is beautifully presented in as new condition, it has only been used by the family as a holiday home, with no expense spared on furniture and fittings.

The apartment has an open plan living area with American style kitchen and breakfast bar. The bedroom has fitted wardrobes, the lounge and the bedroom have level access onto the lower terrace. Take the spiral staircase up and there is a full size solarium with wonderful panoramic views.

El Mirador has two communal swimming pools with generously sized outdoor areas and there is also a pool bar. It is only a short stroll out of the complex onto the El Mirador strip which has a a great selection of the most popular bars. Just across the road there is the Passarella shopping complex with a well stocked Spar supermarket.

The apartment has security grilles and comes fully furnished with all mod cons, including a freezer. The apartment also comes with a garage space.

Visit our main web page to see all the photos of this El Mirador Penthouse Apartment.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Chipeque Los Cristianos Bargain Apartment €78750 – No Offers

This one bedroom bargain apartment on Chipeque in Los Cristianos is located on the first floor of the Chipeque complex with lounge dining room, American style kitchen and bathroom with washing machine. The complex is located in a lovely area of Los Cristianos close to shops and restaurants, very popular for families.

It has terrace leading off of the lounge with views of the gardens and a partial sea view. The complex has a communal pool with pool bar and there are laundry facilities on site. British TV system available.

Offered in good condition and with furniture included.

This Chipeque bargain apartment is great value having just been reduced a massive €36,750 so no offers please. It is worth the money and it is very lettable for holidays or long term, or of course it would make a great holiday home.

Visit our main web page for this Chipeque bargain apartment to see all the photos.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Sterling vs. Euro – 24th January 2011

Sterling vs. Euro – 24th January 2011 -  Rates fall as UK figures disappoint

Last week started off looking like it should be another good one for the Pound, with a slight rise in UK house prices on Monday morning, and then a higher than expected jump in inflation to 3.7% (nearly twice the Bank of England’s target) early on Tuesday, which helped fuel a rise in the GBP/EUR rate to nearly €1.20 again as speculation grew that the MPC would be forced raise UK interest rates.

Graph Dec – Jan – 2010 – 2011

However as the chart shows, any initial optimism for Euro buyers was short lived. Even the better than expected jobs figures couldn’t help the slide in the exchange rate as we moved towards the end of the week. With investors refocusing on perceived weaknesses in the UK economy they started buying back into the Euro as expectations grew that Eurozone policy makers would arrive at a more durable solution to the current debt crisis.

This was topped off on Friday morning as UK retail sales figures were released for December 2010; showing a drop of 0.8% from the expected -0.2% reading. We knew the blanketing of snow the British Isles received in December would have hurt UK retailers, but we also hoped that the VAT increase in the New Year could have perhaps encouraged people to buy before the hike and offset any drop in sales due to the weather; unfortunately, this was not the case and Sterling exchange rates fell as a result.

We have various EU data releases this week (see “This Week’s Data” section below for more info) but we should all be more interested in what’s going on in UK where midweek news could set the scene for GBP-EUR movements for weeks to come. Tuesday brings the first reading of 2010 quarter 4th GDP (economic growth) figures which are expected to show that growth slowed again. The drop is expected to come down from 0.7% to 0.5% and while it doesn’t mean we are back in recession, it could be a sign that the government cuts are starting to take effect on the economy.

This kind of slowdown in growth could lead to potential stagflation (stagnating growth and rising inflation) and would put the Bank of England in a very difficult position whereby a hike in interest rates would help to cool inflation, but could seriously hurt growth and with more austerity measures to come the economy needs all the help it can get. The BoE minutes from this month’s meeting released Wednesday morning could give us more of an insight into their thoughts so we’ll have to wait and see, but on the flipside, better than expected UK growth figures and more bad news about debt problems in Spain and Portugal could easily help force the rate back up towards 1.20 again.

If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open an exchange rate account today and an experienced trader will be in touch to discuss your requirement and offer expert market knowledge.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property Sales

Bargain Country House in Tenerife with large plot

Bargain Country House in Tenerife with a heated pool for sale in El Salto with a very large plot.

This bargain country house is located in El Salto, Tenerife,  just above San Isidro and below Granadilla Abona. The house has 3 bedrooms and it has been reformed to a high standard retaining many character features. It has a bright and spacious lounge, large fully fitted kitchen, three bathrooms and a conservatory. There is also a double garage.

There is a separate one bedroom villa within the fully landscaped gardens. The swimming pool is heated. This is a very private property on a plot which measures 6000 square metres, hence there is a sweeping private driveway up to the house. There is a private terrace, outside BBQ and very good sea and country views.

This really is a charming property with lots of character, a wonderful family home.

Visit our main web page to see all the photos of this Bargain Country House in Tenerife.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Bargain Tenerife Property – Malibu Park Holiday Complex

Bargain Tenerife Property on Malibu Park in San Eugenio Alto for only 64000 Euros. This is an amazing Tenerife Bargain Property – dont miss out in this one! The apartment has one bedroom, an American style kitchen open to the living area, a bathroom and a balcony.

The complex is geared up for holiday letting so it has a 24 hour reception, communal swimming pools, pool bar and childrens play area. Bargain Tenerife properties are getting fewer so now is the time to buy!

Nearby you have many bars, restaurants, Aqualand and Las Americas is just down the hill, a great location.

This complex offers a rental scheme where they pay you €550 per month if you put the property in their rental pool. You could earn even more if you self let for holiday use.

Early viewing of this bargain Tenerife Property is recommended if you are a serious buyer because it will not hang around for long at this price! There is a similar apartment for sale at €85,000 if you need convincing. No offers!

Visit our main webpage to see all the photos of this Bargain Tenerife Property in San Eugenio Alto.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property

Euro Pound Fluctuation after reaching a 4 month high

Euro Pound Fluctuation week ending 17th January 2011, after the four month high.

This time last week, Sterling Euro rates were approaching a four  month high, hitting €1.2060 at the peak. However towards the end of last week this upward trend in rates was over, and we saw a big decline in rates. In this week’s report we look at why exchange rates moved up so far, and what caused it to fall back away so quickly.

The main reason for the recent upward trend in currency rates was due to a very weak Euro. Following the bailout of Ireland and Greece, many people thought that Portugal and Spain would also need assistance. It was this fear that had been weakening the Euro during the start of 2011, helping push rates to their best in over four months.

However, last week Portugal and Spain held a bond auction where they successfully managed to raise significant amounts of finance, allaying fears that another bailout would be necessary. The two bond sales suggest that investors are somewhat more confident about the countries’ ability to pay their debts, and as a result the Euro has regained significant strength pushing GBP/EUR rates down.

After markets realised there was no problem raising capital through Bond auctions, investors were quick to re-invest in the single currency and it was this demand that caused a fall in GBP/EUR rates of more than 2%.

Also helping to strengthen the Euro were comments by European Central Bank (ECB) president Jean Claude Trichet saying that they would have no problem raising interest rates to combat price inflation. Higher rates represent a higher return for investors, and so this also spurred investment to the Euro creating demand that strengthened the single currency.  So the double whammy of possible higher interest rates in the EU combined with more confidence in EU countries being able to raise finance has pushed rates lower.

Going forwards, where rates may move in the coming months is hard to predict. Of course rates could head lower if UK data is poor and markets remain confident in the Euro. However doubts remain over the long-term structural problems in the Eurozone and so we could see further Euro weakness.

In volatile times like this when markets could move either way, it’s important to know the options available to you to ensure you don’t end up paying more for your currency than necessary. Currency Brokers offer various market orders such as Forward contracts that allow you to fix rates even if all your funds aren’t available. They also offer Stop Loss orders which protect you against a downturn in rates while allowing you to still take advantage of any gains.

Contact your Currency Broker today for a free consultation to discuss the options they can offer.  The alternative is leaving things to chance and simply hoping rates will move your way; hope is not a reliable economic tool so take advantage of expert market knowledge to help you budget effectively and take control of the cost of your currency purchase.

If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open an exchange rate account today and an experienced trader will be in touch to discuss your requirement and offer expert market knowledge.

Blog posted by Expedia Property SL – Tenerife Estate Agents for Tenerife Property Sales