- European Commission
The cable has been climbing since July 2013, however, no one has yet expressed concerns about the strength of the Sterling, which can damped economic recovery. According to the latest projections, the economy will only build up steam in the coming years, and with the Bank of England being ready to make the rate hike in 2015, soon we can hear comments similar to RBA's, when policymakers were blaming the "uncomfortably high" level of the Aussie for weak economic growth.
Britain's economy is now growing at the fastest rate of any economy in the G7. Later this year, Britain is already expected to overtake France and Brazil, while in terms of the purchasing power parity, the U.K. has even a potential to overtake Russia. However, in case Scotland will decide to become the independent country, the U.K. will lose around 10% of its GDP and will obviously slip down the rankings. The economy is now benefiting not only from stronger fundamentals, but from demographics as well. Due to immigration and a high birth rate, the population is expanding rapidly. At the time being, the European Commission expects a growth of 2.7% this year, compared with 2.5% three months earlier. At the same time, the EC revised its 2015 outlook, saying the economy will post a 2.5% growth from 2.4% expected earlier. It seems that everyone is so confident about the prospects of the U.K. economy that markets will shrug off any of the disappointing report.
© Dukascopy Bank SA