© Adam Cole
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To my mind, the United Kingdom is probably in a middle of stagnant activity with a little growth. However, I believe that the expectations had been even worse than that, and it is probably still the case. Thus, even growth close to 0% in such a period may well be an upside surprise relative to the very depressed expectations.
Could the Sterling be affected by any decisions made at the ECB policy meeting this Thursday?
We think that the implications are rather moderate. If the ECB were to cut the refinancing rate, it would probably have a small negative effect on the Euro, including GBP/EUR, and the Pound itself could be impacted in that way. However, the refinancing rate is largely of symbolic importance now and I believe the broader implications would be quite limited.
Amid the prolonged weakness both in the Eurozone and the UK how do you expect the GBP/EUR to perform throughout this year?
We anticipate that the Sterling will continue to outperform, thus, EUR/GBP will move back to 0.80 and possibly lower in the coming months.
What is your forecast for GBP/USD at the end of May and end of June?
We expect it higher, but the Sterling to rise by less; therefore, back to the mid 1.50's and ultimately to the high 1.50's. Nonetheless, I think the better players on the Sterling are the crosses, EUR/GBP in particular, if you share our positive view on the currency.