Today euro reached a new record high value against the Great Britain pound after the real estate market of the United Kingdom brought even more negative news thus increasing the chances for the Bank of England to cut the interest rate in January or February 2008.
The Nationwide Building Society released a report today showing that U.K. house prices fell by 0.5% in December. This makes for the second consecutive monthly drop in a row after November’s 0.8% fall.
British Bankers’ Association yesterday reported the weak (but still increasing) mortgage lending data; combined with Nationwide’s report the news indicate how much the housing sector in U.K. is really hurt by the global financial volatility and the domestic problems.
Howard Archer, analyst of the Global Insight has commented this data:
It is clear that the housing market ended 2007 under mounting pressure from increased affordability pressures and tightening lending practices, and it looks set for further deterioration in 2008.
EUR/GBP touched 0.7351 today, making it the 9th bullish day trading session for this currency pair, the rally that is widely believed to continue at least until 0.7400 rate is hit.
Although the chances for the BoE to cut rates in January are still very slim, by February or March the refinancing rate in U.K. will most probably be lower than 5.5%.
If you have any questions, comments or opinions regarding the Great Britain Pound,
feel free to post them using the commentary form below.
