Medium - Longterm outlook for £STG ?

Delancey

Only 1 or 2 months ago we seemed to be heading for Euro parity with Sterling , I think it hit 94.5p at one point. Since then the gap has widened to just below 90p.
I saw on the news recently an item that suggested in 6 months time the rate would be in the region of 80p STG and as we know this would be good news for Irish exporters.
My question is : Is this a realistic prospect ? Surely the continuation of near zero interest rates by the Bank of England would militate against this and surely if E.C.B. rates ( as all seem to agree they will ) rise then the same applies ?

Any comments or views on this ?

MiniDriver

Think Sterling has to devalue tbh, as the British Government will be trying to devalue it to pay off their debts. They have form for this sort of thing.

Euro may devalue due to the structural weakness of a lot of EU economies, but is less likely to be devalued deliberately. Unless the Germans panic, of course.

ei.sdraob

the country is bankrupt (like ireland) but unlike ireland they are not tied to economies that are out of recession and are run in a sensible manner

so only one way and thats down

brown will continue to throw everything in order to get reelected, cut the nose to spite face sort of thing

Dozen Wicked Words

ei.sdraob wrote: »

the country is bankrupt (like ireland) but unlike ireland they are not tied to economies that are out of recession and are run in a sensible manner

so only one way and thats down

brown will continue to throw everything in order to get reelected, cut the nose to spite face sort of thing

Thank you Mr Cameron.

Royal Rover

delancey42 wrote: »

Only 1 or 2 months ago we seemed to be heading for Euro parity with Sterling , I think it hit 94.5p at one point. Since then the gap has widened to just below 90p.
I saw on the news recently an item that suggested in 6 months time the rate would be in the region of 80p STG and as we know this would be good news for Irish exporters.
My question is : Is this a realistic prospect ? Surely the continuation of near zero interest rates by the Bank of England would militate against this and surely if E.C.B. rates ( as all seem to agree they will ) rise then the same applies ?

Any comments or views on this ?

its as simple as this it comes down to interest rates and inflation in a nutshell - i borrowed 20k 2.5 years ago in ireland - then got a job in the uk - i have roughly 11k left on it now - i'm paid in STG which means i'm repaying in STG- i don't think it will go as low as 80 , there are a lot of things riding on this over the next 6 months - the performance of the british v european banks plus the 2 mentioned above - if the tories get back into power the will adopt a very different economic policy than labour i.e they would never of gone tothe same extent to bail out the briitsh banks as labour did, if the bank of england continue to pump -money into the economy the rate will be closer to 90 , house prices seem to be stabilising which is always a good indicator - but i don't think 80 is achievable in 6 months -

Fratton Fred

Royal Rover wrote: »

its as simple as this it comes down to interest rates and inflation in a nutshell - i borrowed 20k 2.5 years ago in ireland - then got a job in the uk - i have roughly 11k left on it now - i'm paid in STG which means i'm repaying in STG- i don't think it will go as low as 80 , there are a lot of things riding on this over the next 6 months - the performance of the british v european banks plus the 2 mentioned above - if the tories get back into power the will adopt a very different economic policy than labour i.e they would never of gone tothe same extent to bail out the briitsh banks as labour did, if the bank of england continue to pump -money into the economy the rate will be closer to 90 , house prices seem to be stabilising which is always a good indicator - but i don't think 80 is achievable in 6 months -

The bail out of RBS had to happen. The Tories would have had to do the same thing, as it really was too big to be allowed to fail. The British Economy was/is very very dependant on the finance industry so although they have acted in pretty much the same way the German and French governments have, along with the ECB, the levels at which the British government had to go to were far higher. it is interesting to note that pretty m,uch every bank associated with ABN Amro has needed a bail out, it looks like the Dutch government dodged a bullet when RBS bought it.

Back on topic, I can't see Sterling recovery much beyond 85 to 90p for the next 12 months, unless the Tories have a completely different view of things and decide to up interest rates to help improve things.

BTW, you should try getting a loan in the UK at teh moment. Although interest rates are very very low, you would be hard pushed to find a loan below 8 or 9%. So although the banks are being bailed out and effectively given cheap money, they aren't passing this on to the end users and creating the liquidity they are suppposed to. Poor old Joe Public is paying through taxes and high interest rates.