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| Sterling has hit its highest versus the euro since Dec 21st 2007 today, at 1.3619 |
The
UK pound continues to hit new record highs against the euro today,
touching 1.3619, its strongest since Decembr 21st 2007, or 7 years
and 2 months. Sterling is rising, because UK retail sales continued
to grow strongly in December, while the UK government achieved its
biggest surplus since 2008 last month. Meanwhile, Germany’s crucial
manufacturing sector neared stagnation for the second consecutive
month in February, weakening the euro.
Sterling
is flying, because UK retail sales rose +5.4% in January compared to
the same time last year, according to figures released today by the
Office for National Statistics. This was –0.5% less than forecast,
yet nonetheless signals that British consumers feel comfortable
shelling out, lifting both the UK economy and sterling.
Moreover,
the pound is also climbing today, because the UK government achieved
a budget surplus of £8.8 billion in January, the most since the
start of the financial crisis in 2008. In total, this means the
Coalition has borrowed £74 billion so far this financial year, -£6
million less than this time in 2014, and is thus succeeding in
reducing the UK’s deficit. This also boosted the pound.
Meanwhile,
the euro is on the back foot today, because Germany’s vast
manufacturing bloc almost stagnated for the second consecutive month
in February, according to economists Markit. German factories
expanded just 50.9 this month, well below the 51.5 forecast, and
dangerously close to the 50.0 that divides growth from contraction.
This therefore brought down the euro today.
