Pound Could Catch Double Pneumonia - The Source - WSJ
Pound Could Catch Double Pneumonia - The Source - WSJ: "Sterling needs more than just an anti-flu jab as the currency is at risk from a dose of double pneumonia.
Stubborn inflation pressure at home, that will probably force the Bank of England to hike rates and burst the U.K. credit bubble, will be the first blow. The other could come from the sovereign debt crisis in Europe, which remains a threat to highly-exposed U.K. banks. If the two come together, the pound could be facing intensive care.
Expectations of a U.K. interest rate hike has risen sharply this week. For months the Bank of England has been trying to stave off any such suggestion, arguing that inflation pressures would subside and justify the current historic low level of interest rates.
But, with global food prices hitting record highs, the price of crude oil rising again, and with many U.K. retailers using a rise in value-added-tax at the start of this year as a way to mask price increases, those inflation pressures look here to stay."
:Text may be subject to copyright.This blog does not claim copyright to any such text. Copyright remains with the original copyright holder.
Stubborn inflation pressure at home, that will probably force the Bank of England to hike rates and burst the U.K. credit bubble, will be the first blow. The other could come from the sovereign debt crisis in Europe, which remains a threat to highly-exposed U.K. banks. If the two come together, the pound could be facing intensive care.
Expectations of a U.K. interest rate hike has risen sharply this week. For months the Bank of England has been trying to stave off any such suggestion, arguing that inflation pressures would subside and justify the current historic low level of interest rates.
But, with global food prices hitting record highs, the price of crude oil rising again, and with many U.K. retailers using a rise in value-added-tax at the start of this year as a way to mask price increases, those inflation pressures look here to stay."
:Text may be subject to copyright.This blog does not claim copyright to any such text. Copyright remains with the original copyright holder.
Comments