Pound Weakens on Tucker's Warning on Prices

The British pound weakened significantly against the US dollar today after Bank of England member Tucker warned that UK consumer prices could fall significantly in the months to come. His thesis is based upon steady oil prices keeping inflation intact. The sharp intraday reversal in oil has helped his credibility but overall UK economic data continues to highlight the general health of the UK economy and the UK housing market.

According to the Nationwide Building Society, house prices increased by 0.9 percent in the month of March, which compares to the market’s 0.6 percent forecast. This drove the annual rate of growth up to 10.2 percent from 9.3 percent. There is no more UK data due for release this week which means that the pound’s fluctuations will be dictated by the abundance of US, Eurozone and Japanese data.