Stronger Pound on a High Against Euro
11/06/2009
The pound has today reached its highest level against the euro since the start of the year after data suggested the UK recession may now be bottoming out.
One pound rose to 1.1758 euros (11 June 2009), having closed the previous day at 1.1672 euros. The pound has also risen against the dollar to 1.648.
News of the strengthening pound comes after the National Institute of Economic and Social Research (NIESR) estimated that the UK economy grew in April and May.
This is good news for more than just holiday makers and combined with other positive results from manufacturing and the key services sector suggested the recovery could begin either later this year or early in 2010.
In April manufacturing output was up 0.2% and the ONS has also revised its previously estimated drop of 0.1% in March to a 0.2% increase. Output of oil and gas from the North Sea has also risen.
However, experts are still urging caution over hopes for a sustained economic recovery.
Kate Barker, an interest rate setter for the Bank of England, said there was concern over the economy beyond this immediate "pick-up".
She stressed that the MPC was likely to keep interest rates "low for quite some time", and added: "There's a lot of concern about what's going to happen beyond this pick-up. The really important question is [whether] there's a pick-up in the economy and if people can sustain that."
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