Rate went down to $1.03 in early trading in Asia ……….recovered to $1.07.
Is there enough for 2 people on that tropical island you’re planning on going to?
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GBP / USD - 38 YEAR LOW - $1.08!!!
- Thread starter mrka
- Start date
Is there enough for 2 people on that tropical island you’re planning on going to?
The idiot I’m dealing with doesn’t understand money. I had to explain how loans work. I think they are some sort of marketing intern.
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Japanese bank Nomura is predicting the pound to drop below parity by the end of the year, 97.3 cents to the pound, based on surrendering outlooks.
BoE expected to hold an emergency rate increase and statement later today, I thought the rate increase was too low, now they will need a very hard increase to steady the nerves of the market, so expecting 0.5-1% increase myself.
BoE expected to hold an emergency rate increase and statement later today, I thought the rate increase was too low, now they will need a very hard increase to steady the nerves of the market, so expecting 0.5-1% increase myself.
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If they don't act decisively (either to just say "no we are holding our nerve let it find it's level" or by raising enough to make a difference) it will be like September 1992 when we crashed out the ERM ( i was about to start the final year of my economics degree and spent all day listening to the radio as I painted a lorry just incredulous as they announced rises from 10 to 12 to 15% over the day)
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It reminded me of Black Wednesday as well. I'm not convinced an emergency rate rise is going to be enough - emergency rate rises never seem to be. Just wait until they announce they're going to buy pounds to support the currency, then the excrement has really hit the cooling appliance.
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From memory that is what they tried firs ton Black wed, when it didnt work they started raising rates but did it too incrementally to be effective - an announcement at 11am that is was going to 14% straight from 10% might have worked
As the market is already costing in a 5.5% rate by next year (i think that is what i heard) anything up to that wont do a lot
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Personally guys, I would be allowing for rates to treble their current levels before the end of next year until this downturn is over, as long as things don't get too much worse in the meantime. Just going on personal experience, this recession is looking a very nasty one.
The days of incredibly low interest rates have gone, back to more realistic levels for now, but this time the whole world is in an almighty mess, not just one economy. Loads of factors can come into play, Turkey is a basket case atm, if Germany suffers too much who will bail out the EU?
We live in interesting times.
The days of incredibly low interest rates have gone, back to more realistic levels for now, but this time the whole world is in an almighty mess, not just one economy. Loads of factors can come into play, Turkey is a basket case atm, if Germany suffers too much who will bail out the EU?
We live in interesting times.
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Not in this instance - the inter currency exchange rates are most definitely not affected by the main stream media.
What people think that means for them might be but or all intents and purposes this far out from an general election it is pretty irrelevant. Biggest thing that will affect them is that a stronger $ means a higher price for oil and gas, as a net importer that is bad for us. As Truss just promised a price cap for gas, every bit of movement down of the £ vs $ adds to the cost of that guarantee in absolute terms and as we raise rates the cost of servicing the debt to pay it as well
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Simply put borrowing is way up, taxes are down, so the confidence to invest in UK Market has dropped. The $ sat at about $1.06 - 7 when i last looked, the overall trend is looking bleak. The highest the £ was against the dollar in the past ten years was £1.70 ish. Its dropped like a stone.
Why is it a massive issue? Because we use it to buy oil and gas. So the whopping £160 billion just given to the energy companies to cap the energy prices is now likely to mean even more. Meanwhile value of government bonds have dropped as interest payments for the government are up.
The solution, Windfall tax and renationalisation of the energy, transport, etc.
I dont think we are recovering from this any time soon, not under this government anyway.
To make matters worse the government seems very anti SME.
Not sure where they are going with this or what their intended plans are. But its not going to be pretty. Vleak outlook me thinks.
Why is it a massive issue? Because we use it to buy oil and gas. So the whopping £160 billion just given to the energy companies to cap the energy prices is now likely to mean even more. Meanwhile value of government bonds have dropped as interest payments for the government are up.
The solution, Windfall tax and renationalisation of the energy, transport, etc.
I dont think we are recovering from this any time soon, not under this government anyway.
To make matters worse the government seems very anti SME.
Not sure where they are going with this or what their intended plans are. But its not going to be pretty. Vleak outlook me thinks.
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Don't see them doing the renationalising thing. They're more likely working on fire sale plans, the £ has been devalued, allowing $ based investment companies the opportunity to hoover things up. The country is now flat broke. That was the final roll of the dice and they've slaughtered it. Vultures are circling from various investment groups in the US and China. Lots of bits to pick at.
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I got an Email Message this morning, and was wondering whether it was Spam. It began with "Good morning my dear. I am Prince Kwasi and I am Chancellor of a Third World Nation . . . "
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TBF, the Americans have been printing trillions of QE dollars.
Same ending, no major economy is looking healthy atm, everyone is going to hurt badly, next year in particular.
Just too add, the BoE had no real choice, due to reducing yields on Gilts many pension funds were on the brink of not being able too meet their requirements, something like 20 million pensions at risk. Hence why the BoE stepped in, without them the funds would have collapsed, and the contagion effect would have gone around the world just like the previous Lehman Bros housing fiasco in 2008.
The UK was within a couple of hours of failing, hence the promise to buy as many guilts as necessary, to calm the markets. Trapped between Blackrock and a hard place, they had to act.
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Did the BoE make the announcement without seeking approval from the PMs office first? It looks like it. Because we didn't hear nowt for 2 days, almost as if they'd told the government to shut up and let the grown ups work without hindrance.
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Mixed bag for me the Truss budget. On the one side you do have to pre-empt and plan vs the screaming banshees who will run the UK down at any opportunity (almost too excitedly for my liking), and they didn't do that, at all. On the other hand it was actually a Conservative in principle budget, and quite noticeably after 20+ years of either Labour or Conservative-in-name-only management both the country and the markets simply don't know how to take that. We're not used to hearing it after a governing consensus of ever larger State and ever greater taxes for years now taking us to our current position of highest tax burden in 70 years - I agree with Truss, it can't go on.
Where I disagreed and had real concern was all we heard about was cutting taxes. And I guess so did the market, they are unfunded tax cuts at present. You can't do it without outlining the difficult decisions and slashing spending and that is the unpopular stuff. IMO should have been coupled with an explicit target to make the State much smaller by X% by Y date etc. Perhaps we will hear this later but not good enough to be guessing with the numbers involved. One aspect was politically naïve IMO, the top rate of tax cut could have come at another time, £2bn with what we're facing down in the wider economy is neither here nor there in it being in place or not, makes sod all difference to the nations finances, so why give your opponents ammunition to shoot you down when you know it'll be an early Xmas present for Labour to declare whose side they're on. Other stuff being lauded as tax cuts was the commentators making more of it than was actually there, hence £ probably shaking off the hysteria now the dust is settling...one tax increase was only just applied (NI) so hardly like we can't imagine a world without it. One tax (Corp) increase hadn't even been due to kick in yet so in effect it was a statement of status quo, not cutting.
All in all I suspected it'd be a feeding frenzy for a few days in the immediate aftermath, the traders need to have their fun and make mischief and then you see the lay of the land.
Where I disagreed and had real concern was all we heard about was cutting taxes. And I guess so did the market, they are unfunded tax cuts at present. You can't do it without outlining the difficult decisions and slashing spending and that is the unpopular stuff. IMO should have been coupled with an explicit target to make the State much smaller by X% by Y date etc. Perhaps we will hear this later but not good enough to be guessing with the numbers involved. One aspect was politically naïve IMO, the top rate of tax cut could have come at another time, £2bn with what we're facing down in the wider economy is neither here nor there in it being in place or not, makes sod all difference to the nations finances, so why give your opponents ammunition to shoot you down when you know it'll be an early Xmas present for Labour to declare whose side they're on. Other stuff being lauded as tax cuts was the commentators making more of it than was actually there, hence £ probably shaking off the hysteria now the dust is settling...one tax increase was only just applied (NI) so hardly like we can't imagine a world without it. One tax (Corp) increase hadn't even been due to kick in yet so in effect it was a statement of status quo, not cutting.
All in all I suspected it'd be a feeding frenzy for a few days in the immediate aftermath, the traders need to have their fun and make mischief and then you see the lay of the land.
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