The pound had a bad start this week after former U.K. Treasury adviser Roger Bootle said that a depression might be coming for the national economy as house prices decline.
Multiple reasons brought the pound down for two days against the euro, dollar and the Swiss franc. Hometrack Ltd. released a report showing that the real estate prices contracted for the 19th month in a row, making investors to lose confidence in the British economy. The yen and the Swiss franc strengthened against the pound on concerns that the swine pig may spread to Europe, and these currencies are considered as safer investments for times of uncertainty. Roger Bootle declarations just added to the already evidently problematic situation in which Britain is presently.
The corrosion happening in the UK is taking the economy faster than the forecasts estimated. Analysts say that the market was not expecting such a rapid contraction for virtually all sectors of the British economy, with massive job cuts and negative reports coming constantly mainly from banking institutions. The pound sterling has been suffered the consequences of Britains domestic problems, and it is expected to break record lows for the next months.
The GBP/USD dropped from to 1.4660 to 1.4572. In Europe the EUR/GBP and the GBP/CHF remained virtually stable after last Fridays rally. The GBP/JPY traded at 1.4068, a sharp drop from 142.35.
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