Prospects for sterling
Article Abstract:
The pound sterling has long been regarded to be a soft currency. For much of the 1970s, this view was fairly accurate given the ruinously high levels of inflation which the UK experienced in that turbulent decade. In the market-oriented 1980s, this perception still prevailed primarily because UK inflation rates averaged out in that decade at a level that was still higher than the inflation rates of major trading partners such as the US and Germany. In the 1990s, however, there is little to support the view that the sterling remains a soft currency. After all, for much of the 1990s, UK inflation has been no higher than that of other industrial nations. As a consequence, it can be predicted that the sterling should eventually rise against other currencies as British competitiveness improves. If this trend is not yet apparent to analysts, it may be because political uncertainties are holding back market expectations of the sterling.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1996
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Mixed prospects for battered sterling
Article Abstract:
The British pound sterling has fallen by 13% to 15% against the European Community currencies and, overall, it has declined nine percent over the year ending Apr 1990 according to the Bank of England's trade-weighted index. The erosion in the value of sterling is the result of large capital inflows due to a worsening current account deficit, the acceleration of inflation, and heavy investment in overseas equity markets, which reached 57% of new investments in 1989. The downward trend of sterling should stabilize since the currency is no longer at the artificial level created by the repatriation of capital after the October 1987 stock market crash, the current account is improving, and a continued massive investment in foreign equities is unlikely.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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Dollar - sterling - the peak is in sight
Article Abstract:
The direction of the currency markets for the rest of 1986 will be determined by whether the U.S. economy is recovering, whether the British pound sterling is headed for another crisis, and whether the 'group of five' is satisfied with the economy. The dollar is still vulnerable, but is now competitive against the yen. However, trade flows are not reversing as quickly as hoped, and the U.S. trade deficit has just stabilized. The decrease in oil prices is causing the United Kingdom's surplus to decrease and its money supply to increase.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1986
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