Abbey comment on the pound breaking through the $2 barrier

Comment from Abbey's Chief Economist, Barry Naisbitt: "Today the pound has again broken through the $2 dollar barrier. Having passed through $2 in late May for the first time in over a decade, the pound then retreated again but stayed over $1.90. Exchange rates are volatile and notorious difficult to predict, and it may be that the expectation of a further rate rise being more likely in the UK than in the USA has played a role in supporting sterling. Those who are planning to take summer holidays in the USA will be pleased to find that their pound will buy more. As with many things in economics, however, there is a balance to be struck. UK exporters looking to sell goods in the US will find that the stronger value of sterling could reduce their sales."