UK Pound Continues Fall

Sterling has began the week as it had ended last week, by depreciating in value against major currencies.

Against the US dollar, the GBP/USD rate is $1.41, the pound has plummeted against the greenback since last week, as fears that the UK will leave the European Union (EU) in the referendum vote on 23 June.

Some of the latest polls have suggested that the result of the vote will be on a knife edge, pollsters YouGov found that 43% of those surveyed were in favour of remaining in the EU, a slender one point lead as 42% said that they would want to walk away from the EU.
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The Independent newspaper sponsored a poll that found a staggering 10 point lead for the leave the EU option.

From the 2000 people who responded to the ORB survey, 55% said that they wanted to leave the EU, four points up from the same poll conducted in April.

A total of 45% said that wanted to stay in the EU, four points down from the previous survey.

In their daily report, LMAX Exchange analysts blamed the threat of the ‘Brexit’ for having a hugely negative influence on the performance of the pound.

And said that there has also been a broad resurgence in US Dollar demand, further adding to downside pressure on the Pound.

The pound’s fortunes against the euro have not fared better this morning GMT, and has continued to lose ground on the euro, a pattern that emerged from the end of May.

Currently the pound is buying just under 1.25 euros, spiralling downwards from 1.26 euros at the start of the day.

Lloyds Bank Survey Shows Weak Output Growth  

Output growth remained subdued across England and Wales in May, according to the latest Lloyds Bank Regional Purchasing Managers’ Index (PMI) .

It was thought that the weakness reflected a deteriorating trend in the flow of incoming new work, with job creation easing as a result.

The business activity index for England, which follows the changes found in the manufacturing and service sectors, scored 53.3 in May, rising from the 37 month low of 52.1 in April.

Although this still signalled the slowest rise in growth for the past three years, and the index’s average total of 52.7 for the second quarter, is the lowest the survey has been since the first quarter of 2013.

Slow growth in overall business activity was partly a reflection of the weaker flow of incoming new trade, the rise in the amount of new business was the slowest seen since February 2013 across England.

In Wales, the private sector economy lost further momentum in May, with output growth at a 45-month low, and new business moving closer to virtual stagnation.

May also saw the pace of job creation slowing down in England, falling to the lowest for three years, amid reports of the new National Living Wage having a negative impact on hiring.

Wales, in contrast, recorded the strongest rise in employment in five months, even though the level of job growth was moderate.

Average prices charged for goods and services increased, but overall cost inflation was slightly below April’s recent high.