1 Wk 0.59%
1 Month -1.61%
3 Months -2.52%
6 Months 2.22%
1 Year -3.15%
High 1.6458
Low 1.423
Q1 2011 1.55
Q2 2011 1.55
Q3 2010 1.58
Q4 2010 1.56
An expanding UK trade gap pushed sterling back from a one-month high against the dollar. The deficit expanded unexpectedly in November, rising to £8.74 billion from the October figure of £8.6 billion; economists surveyed by Bloomberg had expected the gap to narrow to £8.4 billion. The gap widened as a surge in imports countered a gain in exports arising from the weak UK currency. BNP Paribas commented that the data showed that export growth was continuing to improve, while increased raw materials imports pointed to ongoing strength in the UK’s manufacturing sector. A fairly optimistic jobs survey from KPMG and the Recruitment and Employment Confederation (REC) helped to limit sterling’s losses, as it found that permanent staff vacancies were rising at their fastest rate for four months. The computing, professional, engineering and accounting sectors reported the strongest increases, although KPMG cautioned that the coming job cuts in the public sector and the recent VAT increase may cause the recovery to stall. Official unemployment figures will be released next week, and these will be closely watched to see if the jobless total rises. More immediately, the Bank of England’s Monetary Policy Committee (MPC) is meeting today and tomorrow. The main highlight will be not the interest rate and asset purchase programme size, both of which are expected to remain unchanged, but whether the MPC gives any further comment about inflation. Bank officials have become more vocal of late about watching inflation, and any signs that hawk Andrew Sentance has been joined by other committee members may provide a lift to this currency pair in the short term. Chris Beauchamp, London
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