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Currency relief short-lived in foreign markets

Weakening of the pound in recent weeks has aided the UK in foreign markets


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The pound is likely to strengthen on the year, one expert has said
The pound is likely to strengthen on the year, one expert has said

A WEAKENING pound against the euro will only aid UK food exports in the short-term, one expert has said.

 

Farm chiefs claimed favourable currency movements have helped UK prices in recent weeks, particularly in the sheep sector (see page 11).

 

But speaking to Farmers Guardian, Jeremy Cook, chief economist at international payments company World First, said while a weaker sterling may aid UK exports in the short-term, the pound was likely to strengthen over the year.

 

"Sterling has not had a great couple of weeks," he said. "About three weeks ago selling the pound you would have got about €1.43, now we are down to €1.37. It is not a world ending fall but it has come off the highs."

 

But Mr Cook said sterling was likely to strengthen on the year.

 

"It is a bad market for exporters at the moment with the strength of the pound and the weakness of the European economy. Unfortunately things are more expensive and less in demand," he said.

 

Last month, concerns over the Chinese economy caused volatility throughout global markets. Mr Cook claimed while the ’dust had settled’ on the immediate impact of China, there may be further long-term impact.

 

"The long term impacts are still yet to really land in Western economies," Mr Cook claimed. "We are looking at lower inflation. The ripple effect has to be what that does to monetary policy."

 

He claimed he had revised his estimation of when interest rates would be raised from February to June next year.


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