Fears of Recession in UK Weaken Pound
The Great Britain pound dropped today on fears that the United Kingdom may slip into recession as economic indicators signal that the economy is slowing and austerity measures deter growth.
The problems in Europe may have boosted demand for the sterling a safe haven, but they have a negative impact on economies all around the world and Britain is not immune. In fact, being the member of the European Union, the UK is heavily exposed to the negative consequences of Europe’s debt issues. The country attempts to reduce its record budget deficit by austerity, but such measures, while usually help in reducing debt, do not support growth. The worries about the UK economy make traders think that the ”safety” of the pound is not that safe.
GBP/USD fell from 1.5507 to 1.5413 and GBP/JPY dropped from 123.62 to 122.22 as of 16:45 GMT today.
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Earlier News About the Great Britain Pound:
- Pound Rises as Creation of European Stability Mechanism Delayed (2012-07-11)
- Pound Gains vs. Euro on Manufacturing Data, Falls vs. Dollar (2012-07-10)
- UK Pound Mixed as Forex Traders Look for Direction (2012-07-09)
- Bank of England Expands Asset Purchase Program (2012-07-05)
- UK Pound Struggles ahead of BOE (2012-07-04)