Today the United Kingdom lacks major economic data yet the misery remains in the third quarter as they are still trying to contain the worst economic growth that hit them since the post war era despite the slight optimism we saw in the second quarter.
Last week, reminding you dear reader of the major events we saw the UK contract in the first quarter by 2.4 percent, marking the worst quarter since 1958 as it was revised downwards from 1.9 percent revised while the annualized GDP we saw that it contracted by 4.1 percent, the worst since 1948!
It was obvious that the nation contracted as a result of unemployment rates at 7.2% since the lack of pounds being spent in the nation further undermines growth prospects because now the nation needs money flowing to prosper correctly.
The central bank is already trying to exhaust all measures to stimulate economic growth as they have interest rates down to 0.50% the lowest since the banks foundation while later this week the MPC members will meet as they decide to once again leave them unchanged.
Also in other highlights for this week is the Group of Eight summit in which Prime Minister Gordon Brown will state the world economy is at a key point and the governments around the world should support banks as they are still not lending to consumers which will continue to hurt growth.
Brown is doing what it takes to once again gain popularity amongst Britons as lately he has been very unpopular as the people of the UK feel that the Labour Party is not doing enough to shore up economic growth.
While in other news, Chancellor of the Exchequer Alistair Darling, says that he will give the Bank of England more powers and the Financial Services Authority to avoid another financial shakedown. The central bank is already applying quantitative easing methods as they are buying gilts worth 125 billion pounds.
From the anticipations in the market that the BoE might continue to use different measures to help a recovery in the UK, right away weighed on the pound causing it to depreciate in the markets as investors feel that a recovery in the Kingdom is still from our sight. As of 12:18 GMT we see that that GBP/USD is being trading at 1.6142 while recording a high of 1.6328 and a low of 1.6096.
The UK stock markets also fell led from declining oil and metal prices which resulted in mining and energy company shares to decline as they marked the lowest level in nearly 2 months. As of 12:20 GMT the FTSE-100 index shed 46.82 points or 1.11% to 4,189.46 points.
As officials are continuing to use all possible measures to boost the economy out of recession, therefore is giving us more support that this crisis we are seeing in the economy will take longer than presumed to fully end.