The Great British pound strengthened against its rival currencies on Tuesday as it was announced that the UK’s manufacturing output had reached a seven month high.
Buoyed by news of higher than expected manufacturing figures and retail sales, the pound sterling climbed 0.95 percent against the euro and reached a two week high of £1.5821 against the US dollar.
UK retail sales grew a healthy 0.7 percent last month, maintaining October’s increase of 0.8 percent. The output of UK manufacturing also climbed, reaching 0.6 percent for October and exceeding the expected increase of 0.4 percent.
The manufacturing output rate is the highest recorded since March this year, prompting optimism for the UK’s economic recovery.
Briain Hilliard of Société Générale said that he expects further gains in November:
"Stronger utility numbers with the colder weather should also give a pick-up in industrial production. It shows the economic recovery is continuing, although of course we need to look at the services side too. The biggest influence on the Bank of England will be the inflation profile and we know that is problematic."
It is thought that the figures are unlikely to prompt the Bank of England to make any changes in interest rates over the coming months.
Meanwhile all eyes are on the performance of the Euro as Ireland’s toughest austerity budget is passed its first parliamentary vote.
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