Sterling soars but data offers little economic reprieve

London - 18 March 2010

Sterling soared this morning after Public Sector Finance Data came in much better than expected. Borrowing rose to a fresh new high of £12.4 billion last month, although was well below the £14.75 billion expected by the markets.

Mark Bolsom, Head of the UK Trading Desk at Travelex, the world’s largest non-bank FX Payments Specialist, said, “Sterling is rising as the markets latch onto the fact that the data is better than forecast. Other than that, there seems to be little economic reprieve – in fact, the data is really quite gloomy.

“Lending to businesses fell in January at it’s fastest annual rate since records began, money supply grew 0.2% , it’s slowest annual rate in a decade, and overall government borrowing hit a record-high.”

Bolsom comments, “In particular, the marginal growth of money supply is a real cause for concern, confirming that the Bank of England’s quantitative easing programme is failing to have any tangible or positive effects for UK consumers and businesses.”

Against the pound, the euro was down 0.12% to 1.1193, and 0.09% against the dollar, to $1.5314.

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