Why is the pound in a state of collapse ?

[yllig]

From thisismoney.co.uk site on Monday.

Ian Stannard, senior currency strategist at BNP Paribas in London, said: 'In the near term we can expect quite a significant bounce for sterling. The fall in the pound was exaggerated and overextended in December. We see sterling pulling back quite sharply.

Henrik Gullberg, senior foreign exchange strategist at Deutsche in London, agreed: 'Sterling looks very undervalued. It is way below where it should be against the euro, if you look at the fundamentals.'

The turnaround in sterling's fortunes came despite the fact the Bank of England is expected to cut interest rates by at least half a percentage point on Thursday from the current 2% level. Traders said a cut was already priced into the value of sterling.

Reports that the British Government may guarantee the market for asset-backed securities to improve bank lending also gave a fillip to sterling.

Stannard said the euro was sliding on fears for the eurozone: 'We know already that things are bad in the UK but the market is only just waking up to what's happening in euroland. We think the European Central Bank is going to have take more aggressive steps [to cut rates]. The ECB has dragged its feet.'

The ECB may find it easier to cut rates when it meets on 15 January after inflation figures today showed prices fell by more than expected in Italy and Spain in December.

Analysts pointed out that some of the euro's unexpected strength came from European banks repatriating euro funds to settle accounts by the year end.

This may explain it in part.

[torry]

I think it is because the euro has become overvalued and is causing big economic problems for some eu members particularly Spain, Portugal, Italy and Greece.

[Peter_essex]

Nothing to do with this thread but I am curious to see what happens considering what has happened to other threads this evening. If you are expecting some great insight into the state of the pound please do not visit this link you will be dissapointed.

[John50]

Many of us will feel a real sense of relief if the pound recovers somewhat. I for one have been very worried about my ability to pay my way here in Spain.
As I write at 1.112 to the pund. The BofE meet tomorrow to discuss interest rates and the ECB next week. Let's hope for some stability.

[Chrisdee]

Why shouldn't we have a UK bank account?

As I use them as well, I so hope Nationwide always remain kind to us ex pats who really shouldn't be having a UK bank account at all !

Good to see 1.09 today.

[John50]

I have always thought that unless you maintained a UK address, you were not entitled to have a UK account. Where would the banks write to you, for example ? I might be wrong but every on line account I have ever looked at back in the UK asks that you confirm that you are a UK resident.

[Chrisdee]

We have a couple of bank accounts and they know we live in Spain, we receive our mail here (if we're lucky!). Nothing has ever been said, in actual fact when all the banks were going under (Sept/oct) we had to safeguard our savings and needed to open up another bank account and I remember my husband having to go to the library to use the computers and and print off an Iberdrola bill for proof of address.

I have always thought that unless you maintained a UK address, you were not entitled to have a UK account. Where would the banks write to you, for example ? I might be wrong but every on line account I have ever looked at back in the UK asks that you confirm that you are a UK resident.

[John50]

I just did a quick internet search and this is one of the pages I turned up.

Open UK Bank Account from Abroad? | Ask Metafilter

I would love to open another UK account but every high street bank or building society I have checked seem to ask for proof of UK address. I bow to your knowledge though and wonder of you could reveal which Bank/Building Society let you do this. I currently bank in the UK with Nationwide having been with them for years.

I am very wary of offshore sterling accounts having read of the plight of hundreds of expats who lost everything with banks based on the Isle of Man where apparently there are no guarantees and i don't overly trust some of the banks here either. As I have said, good old Nationwide. Low interest rates but fairly safe, I hope.

[VTDD]

If I opened a Nationwide account could someone please give me a rough idea of what exchange rate I might get if the commercial rate was 1.10

I can't find anything about this on their web site
Thanks

[John50]

You will get that commercial rate and as I write it is 1.108. It needs to be a Nationwide 'Flex' account where a visa direct debit ATM card is issued. Daily limit at ATMs' is £300 which means not so many Euro of late. I am surprised Nationwide are not inundated really. I've been a member for years.

[John50]

Of course, today's the day!

BBC NEWS | Business | Rates tipped to hit all-time low

[VTDD]

Thanks John,

I'll try and sort a Flexi account on line here, but if not I am in UK next week for a few days.

[Warrior]

Luckily our worries are over!
Smiler Brown and Darling Alistair have the answer, according to todays headlines - "They´re going to print more money", now why didn´t we think of that?
God Help Us All......................!!!

[yllig]

Of course they are denying they are going to print money but they have denied a lot of things.

If they do and we have too much money in the system, it may cause very high inflation and the £ could end up worthless. Apparently we could end up like Zimbabwe where money is worth nothing at the far extreme of things.

Only .5% off the base rate and sterling up to 1.12. Looks like they have shown a bit of sense. Lets hope that the ECB do make a cut on the 15th or sterling may go back down again.

Time to take some more money out I think.

[John50]

Of course they are denying they are going to print money but they have denied a lot of things.

If they do and we have too much money in the system, it may cause very high inflation and the £ could end up worthless. Apparently we could end up like Zimbabwe where money is worth nothing at the far extreme of things.

Only .5% off the base rate and sterling up to 1.12. Looks like they have shown a bit of sense. Lets hope that the ECB do make a cut on the 15th or sterling may go back down again.

Time to take some more money out I think.

Hi Yllig. Hope you are 'hanging on in there'.

Yes, rate cut to 1.5% here:

BBC NEWS | Business | Interest rates hit all-time low

Let's hope the ECB cuts rates next week.