High UK unemployment data puts pressure on sterling

Published: 17 November, 2011

UK unemployment continues to grow hitting 17 year highs as the private sector is unable to take up the slack from those being made unemployed in the public sector.

Currency rates - November 17

EURO/GBP - 1.1676

US$/GBP - 1.5756

CHF/GBP - 1.4475

CAN$/GBP - 1.6088
AUS$/GBP - 1.5612
ZAR/GBP - 12.8057
JPY/GBP - 121.11
HKD/GBP - 12.2508

NZD/GBP - 2.0528
SEK/GBP - 10.6872

AED/GBP - 5.78

US$/EURO - 1.3470

Unemployment for the under 25's is over 20%. We also had yesterday the Bank of England forecasts for the UK economy which reduced growth expectations over the next nine months to nil as a result of the problems in the euro zone which is the UK's main export market. Further quantitative easing is being talked about which meant that sterling gave back its morning gains against the euro in the afternoon. One positive from the BoE was their expectation that inflation would be less than 2% by the end of 2012. But they have been wrong before. So the UK is not in a great position economy wise.

Business confidence in the euro zone begins to ebb away as the markets wait for a comprehensive and believable plan with regard to restructuring of their debts, bank and government. Yields on Italian government debt hovered around the 7% level which given that this seemed to be dependent on buying by the European Central Bank is not comforting. So as uncertainty reigns and I suggest you give us a call to get the latest update.

The US$ continues to benefit from its safe haven status and strengthen against sterling. But the US economy is also suffering from the uncertainty in the euro zone and expectations for US company performances such as the banks are beginning to be downgraded.

The commodity backed currencies held their own yesterday. The euro zone crisis is having an effect on business confidence worldwide and although still growing the Far East is still dependent on what happens in the northern hemisphere.

Supplied by Nick Ryder of Smart Currency Exchange, the currency partner to Harpers Wine and Spirit who have teamed up with Smart to provide readers with a free bespoke currency service. Go to www.smartcurrencybusiness.com/winespirit for more information or call on 0207 898 0500.

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