Sterling Falls- UK Inflation Higher Than expected

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or Qualifying Recognised Overseas Pension Scheme(QROPS) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

Sterling fell to a 3 ½ week low against the euro to €1.1702 on Thursday as Moody’s put Spain on review for a possible downgrade causing concerns of sovereign debt problems are spreading throughout the euro zone. Moody’s did comment that it did not see the possibility of Madrid needing a EU bailout similar to Ireland or Greece. Spanish costs are rising which is making things difficult for the debt ridden nation’s economic recovery.

Sterling also fell to a 3 week low against the US dollar after strong US figures helped boost the dollar. Sterling was also dented by UK unemployment rises 35,000, the first increase since the spring. UK unemployment has risen back over the 2.5 million mark causing fears that Britain is suffering a “jobless recovery”. City economists were expecting a drop of 15,000 in the number of people out of work, which would have lowered the unemployment rate to 7.7%. The rise in unemployment was mainly caused by a drop in public sector employment where 33,000 jobs were lost over the period.

The north east saw the biggest fall in public sector jobs, followed by the south east and west of England. Chris Grayling, the employment minister, said the figures showed the importance of keeping the UK economy growing. "It's essential to create a stable environment where businesses can flourish and create jobs – with those on benefits at the front of the queue to take them up," Grayling said.

Meanwhile the dollar continued its gains against the Euro and Japanese Yen following the release of better than expected consumer price data Empire manufacturing data. CPI rose only a mere 0.1% in November however US empire manufacturing increased in December to 10.57 compared to 11.14 drop in November.

The Euro remains under downward pressure as the troubles in the Eurozone continually mount, which wasn’t helped today by Moody’s warning that Spain is in danger of being downgraded.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

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