Pound Marks New Record Low Against Euro As Housing Slump Deepens

Pound Marks New Record Low Against Euro As Housing Slump Deepens

The British pound was unable to capitalize on the dollar’s weakness at the end of last week; and today’s data reminds us why: the UK economy is looking a lot like its US counterpart a year ago. An unfolding housing recession is perhaps the most blatant comparison being made between the two economies. The Nationwide House Prices indicator for February reported the fourth consecutive monthly decline in residential inflation – the worst trend from this series since the beginning of this decade. What’s more, the annual gauge cooled more quickly than expected for its worst reading since September of 2005. The sticky credit market is another factor that may cool the UK economy to a crawl. Banks have yet to pass on the BoE’s recent rate cuts, leading to the second fewest mortgage filings on record.