The Great Britain pound was mixed today. The sterling rose a little versus the US dollar, but erased its earlier gains against the euro and the Japanese yen. The European crisis increases attractiveness of the UK currency, but the domestic problems limit investors’ interest in the pound.
Prime Minister David Cameron talked about the necessity of the United Kingdom to act quickly if it wants to keep up with the world economy. Cameron said:
Unless we act, unless we take difficult, painful decisions, unless we show determination and imagination, Britain may not be in the future what it has been in the past. Because the truth is we are in a global race today, and that means an hour of reckoning for countries like ours
Such comments gave hopes that the government will act to support the failing UK economy.
Optimism was trimmed by Bank of England Governor Mervyn King, who voiced his doubt that the accommodative policy can help indefinitely. King said:
There is no technical limit on the asset purchases … (but) I think there is a deeper question about whether there are limits to what monetary policy as such can do.
GBP/USD rose from 1.5999 to 1.6010 as of 20:26 GMT today. EUR/GBP fell from 0.8048 to 0.8028, but rebounded to 0.8052 later. GBP/JPY traded at 125.13 after it rose from 125.18 to 125.59 earlier.
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