020 7898 0500It was a bit of a mixed day again for sterling yesterday as it weakened against the euro but strengthened against the dollar. More and more we are coming across commentary and analysis that GBP/EUR parity could happen in early 2018, with some suggesting it might be before the year is out. Had anybody said this a year ago they would have been ridiculed – what a difference a year makes…
Indeed, the continuing concerns over Brexit and lack of progress in the negotiations are weighing heavily on the pound; yesterday it fell to its lowest mark against the single currency since the beginning of 2009. However, it is worth noting that it isn’t simply sterling weakness causing this – the euro has been consistently strong for some time now and, despite Mario Draghi’s reticence last week, the markets are expecting the European Central Bank to cut back on its economic stimulus.
Elsewhere, Nationwide reported that UK house prices fell this month, with the average price falling 0.1% between July and August. Nationwide’s chief economist Robert Gardner admitted it was slightly surprising given the strength of the labour market, but household finances are under increasing pressure as the cost of living rises steadily and wage growth is stagnating.
Today we have the release of the borrowing numbers.
