Sterling vs. Euro – 3rd May 2011; Positive GDP figures
May 3, 2011 Leave a comment
Sterling vs. Euro – 3rd May 2011; Positive GDP figures brighten outlook for shaky UK economic recovery
The eagerly awaited UK GDP first quarterly figures for 2011 were released on Wednesday and showed the economy expanding in line with general expectation at 0.5%. Given the previous quarter’s negative 0.5% contraction last week’s positive figures depict an economy returning to growth, quelling any fears of a double dip recession.
A closer look at the figures highlights the positive impact of the manufacturing and service sectors.
Currency analysts suggest that UK GDP data was possibly too weak to prompt a Bank of England (BoE) rate rise as soon as next month, although it has still left open the possibility of a rate hike in the summer.
Latest Euro Pound Exchange Rate Graph– April 2011
Indeed, should UK figures show consistent improvement throughout the month of May, then a summer BoE rate rise is still a possibility. As it stands however, the positive figures are too often coupled with negatives ones, leaving the UK recovery in a fragile state. Concerns over the underlying strength of the economy and its ability to withstand the fiscal squeeze remain firmly intact.
In summary, Sterling-Euro rates remain low and may well do so for some time. Therefore if you have a requirement to buy Euros click the link below to open an account with us today – free of charge and without any obligation.
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