Weekly € rates and comments – week commencing 4th August 2008

It was another week of mediocrity on the markets for Sterling as the onus had been shifted to achieving some stability in the economy. For all of the unflattering economic data that was released over the last week, it has been the consistency of equally poor data from the Eurozone that helped keep the pound with its head above the water. Energy prices soared from some of the UK's largest suppliers and further inflationary issues are keeping the Bank of England's hands tied over making a much needed cut in interest rates to boost growth.

  

Europe was showing more, clear signs of slowing growth and pulled back from its record highs against the US dollar in the previous week and is currently at 1.2640/£1. The spectre of high inflation is now no-longer a concern for the UK alone, as reports from July showed inflation to have reached 4.1% in the Eurozone in the last quarter. Consumer confidence has shown to have decreased substantially and a hike in interest rates will be even less likely this year.