Pound Drops on Blanchflower’s Comment

The Great Britain pound fell today against its major counterparts after the private report on July house prices decline and the commentary made by the Bank of England policy maker.
There were two significant down-pushing factors for the pound today. First was the report by the Rightmove Plc, Britain’s most popular website on real estate, which showed a serious decline in the U.K. housing sector. Second was the recession-related commentary by David Blanchflowersaid, an external member of the Monetary Policy Committee, made for the Guardian today.
The Rightmove’s report showed the average property asking price in July declined 1.8 percent compared to June and 2 percent compared to July 2007. This was the first drop in an annual rate since 2002.
In his interview with the Guardian David Blanchflowersaid said that the United Kingdom’s economy is currently entering the recession period which may last more than a year. He also said that the central bank will probably have to lower the interest rate to support the economy. The next BoE’s monetary polciy meeting is scheduled for August 5. The current bank rate is 5 percent.
GBP/USD fell from 1.9952 to 1.9921 today as of 7:31 GMT. Pound also declined significantly agains tthe Japanese yen today — GBP/JPY went down from 213.37 to 212.37. EUR/GBP rose from 0.7937 to 0.7963.

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