A strong pound could damage both the economy and portfolios as sterling hits new highs and the UK enters a technical recession for the second time in three years.
The Bank of England’s trade-weighted index, measuring sterling against a basket of currencies, reached 83.3 last Tuesday; the highest since August 2009. It regained this level later in the week despite news a 0.2% contraction in GDP in Q1 has sent the UK back into recession. The currency was trading at $1.623 against the dollar last week, a near eight-month high, and M&G head of retail fixed interest Jim Leaviss said sterling will increasingly become a focal point for policymakers. “One of the stated aims of UK economic policy is to rebalance towards manufacturing. German industry ...
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