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Gordon's Innaction On I R Is Affecting Sterling

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Sterling hits 2-1/2 week low vs euro on rates view

Mon Jun 26, 2006 8:44 AM BST

LONDON, June 26 (Reuters) - Sterling held near last week's two-month troughs against the dollar and hit a 2-1/2 week low versus the euro on Monday as strong UK housing market data failed to change expectations that
rates will not be hiked soon



In contrast
, the U.S. Federal Reserve is widely seen tightening policy to 5.25 percent this week and possibly raising in August, and the European Central Bank is also expected to hike rates at least once more this year from 2.75 percent.

Perhaps Gordon is cognisant of the trend behind the EA hype:


Richard Donnell, director of research at Hometrack, said confidence is

fragile despite reports of a buoyant market. He said high house prices,

stretched affordability levels and rising unemployment could hit sentiment.

"Whilst there is clear momentum in the market we believe that a modest

cooling in the rate of growth is likely over the second half of the year, he

concludes," he added.

He also said the headline figures masks the "stark" difference between

London and the rest of the country, as a result of the capital's

underperformance between 2001 and 2005.

Edited by Realistbear

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This is beyond a joke. Didnt the BoE say if Brits keep spending rates will keep rising? What happened to that?

What the BoE say has no clout. Its what Gordon decides and until he is firmly in at No. 10 he will do nothing to displease his HPI-MEW constituency. Politics are more powerful than some give credit for.

Edited by Realistbear

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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