UK house prices at 3 year high. Pound steady against Euro after Spanish rating cut.

Good Morning. The Pound has been pretty quiet for the last two days which is surprising considering the volatility we would expect after Greece’s credit rating was cut to “junk” (meaning Greece is un-investable), and Portugal & Spain’s were both downgraded too. Rates @ 09:00am are as follows:

  • GBP/EUR 1.1521
  • GBP/USD 1.5222
  • GBP/AUD 1.6436
  • GBP/NZD 2.1131
  • GBP/CAD 1.5347
  • GBP/ZAR 11.244
  • GBP/JPY 143.09
  • GBP/CHF 1.6520
  • EUR/USD 1.3205

UK House Price Inflation hits a 3yr high

The annual rate of UK house price inflation has hit double figures for the first time since June 2007. The Nationwide building society (one of Britain’s biggest lenders) said that house prices in the UK had risen by 10.5% in the year to the end of April. They stated that house prices rose by 1% in April to push the cost of the average home in the UK to £167,802. They did however, predict that the past year’s surge would tail off later this year, with sellers starting to outnumber buyers.

US Interest Rates

The US Federal Reserve is to keep its main interest rate at a near zero level and expect to hold it there for an “extended period.” They said that “subdued inflation” and other factors are likely to warrant keeping rates at their historic lows. Despite keeping rates low to boost the economy, the Fed was however up-beat about growth.

It noted that consumer spending had picked up as well as seeing improvements in the housing market. They do however think that high unemployment and continued falls in bank lending still presented hurdles for economic recovery.

Finally, the third and final live election debate is on the BBC and apart from Gordon Brown’s “slip up” yesterday, the economy should be the main focus. With this in mind and the fact that we are now only a week from polling day, we could see some movement in Sterling tomorrow depending on who comes out on top.

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