The pound edged higher, achieving its biggest weekly advance against the euro since January, as signs pointed to the UK economic recovery talking hold.
- The pound/euro pairing was little changed at the end of last week, though sterling did creep up, supported by reports showing gains in consumer confidence and UK house prices.
- Month-on-month property prices were up for the sixth consecutive month in October and were 2% higher than in the same month the previous year. However, the pace of monthly price rises has eased, going up by just 0.4%.
- Meanwhile in the eurozone, data revealed that the unemployment rate rose to 9.7%, in line with market expectations, which raised concerns that recovery could still be destabilised, dulling demand for the euro.
- Last week the Bank of England completed its £175 billion asset purchase programme and so investors are now looking toward an extension of QE in their meeting this week.
- Analysts have noted that until the market is confident the BOE is done with quantitative easing, it is going to be very difficult for sterling to rally significantly from current levels.