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Updated 18:04 18/05/21

Pound plunges and UK economy too difficult to estimate...

By Daryl Jackson, News Editor

12 Jul 2017

There’s bad news as far as the pound is concerned this morning.

The pound has hit its lowest level against the euro since November 2016.

Sterling has weakened to €1.1187, which means one euro is worth 89.4p.

Before last June’s EU referendum result, the pound was worth €1.30.

It’s being put down to the fact that Bank of England deputy governor Ben Broadbent said he is not ready to vote to raise interest rates next month.

Speaking to the Press and Journal in Aberdeen, Broadbent said that the state of the UK economy was still too difficult to estimate or assess.

And that makes it “very difficult” for the monetary policy committee to judge if business confidence is strong enough to support higher borrowing costs.

He said:

“If you look at the past six to 12 months, economic growth has been okay and the employment rate good. Unemployment has drifted down a little … and inflation is higher.

“There is reason to see the committee moving in that direction (higher interest rates) – but there are still a lot of imponderables.”

He added:
“In my opinion, it is a bit tricky at the moment to make a decision (to raise rates). I am not ready to do it yet.”
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