The New Year brought with it a New High for the Pound against the US Dollar, $1.6553, which is the highest level since 2011. But before we could even pull a party popper the all important (tongue in cheek) PMI or Purchasing Managers’ Index pooped on our party with disappointing Manufacturing figures. This is an indication of British manufacturer’s optimism in the coming months, buy what forward orders they place. the figure is still above 50 which shows a positive momentum. A rate hike looking more and more likely this year rather than 2015.
While the debate in the UK is about how long to keep interest rates at these low levels over in Japan they can only dream of such worries after 15 years of deflation and negative interest rates. This is due to the new Government’s huge stimulus package, printing money, which saw prices rise slightly and their stock exchange make huge gains.
China is starting to show some of the negative traits of its more economically developed peers in its ever-increasing levels of public debt. Getting close to 60% of GDP it is still not at the same levels of Japan, at over double that figure, but there are worries that this could spiral due to bad debts and increased borrowing.
