RLAM comments on the value of Sterling

Ian Kernohan, Economist at RLAM, comments on Sterling “With the gap between UK and US interest rates set to widen, sterling will take the path of least resistance against the dollar. This will bear down in imported inflation and by making imports cheaper, will crowd out domestic activity and cause the economy to slow. Gordon Brown’s decision to keep the pound means that the UK economy has an extra safety valve which helps in the adjustment process”.