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UK Pound Struggles Against Dollar on Recession Concerns

July 30, 2012 at 13:33 by Miranda Marquit

Various pound notesUK pound is struggling against the US dollar today, thanks in large part to concerns about a deepening recession. Fears about a British recession have been mounting in recent weeks, even with the Olympics being hosted in London. Economic focus is on the data in the United Kingdom, and it is doubtful that the Olympic Games are going to be able to counter that.

One of the main factors in today’s slide for the UK pound is the latest mortgage approval data. In June, mortgage approvals in the United Kingdom declined more than expected. With housing still an issue, it is little surprise that the economy is struggling. Other fundamentals are weak, and Prime Minister David Cameron and Chancellor of the Exchequer George Osborne are still insisting that budget cuts to reduce the deficit are the way to go. Unfortunately, so far, the deficit has continued to grow, even with austerity, and there hasn’t been much economic stimulus.

The Bank of England will need to decide what to do next. A meeting is coming up, along with a rate decision and a policy announcement.

At 13:28 GMT GBP/USD is down to 1.5683 from the open at 1.5737. EUR/GBP is down to 0.7799 from the open at 0.7814. GBP/JPY is down to 122.6015 from the open at 123.4925.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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