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Pound at record low against euro
The
pound has fallen to a record low against the euro, as dealers expect
more Bank of England (BoE) interest rate cuts in 2008.The pound bought
just one euro 37.6 cents in quiet Christmas Eve trading.”There are
increasing signs that the British economy has hit a brick wall
triggered by the decline in the housing market,” said analysts at BNP
Paribas.The European Central Bank (ECB) president Jean-Claude Trichet’s
recent comments have also boosted the euro.
Inflation and growth
In
an interview with the Financial Times, Mr Trichet hinted that the ECB
was more worried about inflation than economic growth.He said that
interest rate cuts in the US and Britain should not distract the ECB
from tightening its monetary policy.”Other colleagues are in a
different situation,” Mr Trichet said.Britain’s record trade deficit
has also helped push down the value of sterling.
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