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At the Forex currency market the British Pound rate continues to rise in price on Monday following markets’ growing interest in risk.

Forex recommendations: In case of break down at the level of 1.5985, target for the purchase will be the levels of 1.5990 and 1.6000.

Meanwhile, market is very sensitive to risk; investors believe that European debt problems will be resolved any day now, and then financial world will again obtain   some stability and prospects for recovery.

Earlier it became known that retail price index BRC in the UK increased by 0.2% m/m (+2.7% y/y) in September. Volume of retail sales BRC in the UK increased by 0.3 y/y in September. Thus, according to the survey of the British Consortium of Retailers volume of retail sales rose slightly on annual basis last month; however monthly dynamics is mixed. Prices for food continued to grow, demand for clothes and footwear fell despite the seasonality. Therefore, basic demand is minimal at the moment. The data released earlier showed that volume of production output in the UK increased by 0.2% m/m (-1.0% y/y) in August.

Great Britain reiterates that it is Europe that seriously impedes its recovery. Last week, representative of the Bank of England Mr. Bean said that the Bank of England had been focused on medium- term inflation prospects at the moment. However, the country is still significantly affected by the developments in Eurozone. Recent data, which showed the rise in inflation, had been triggered by number of factors of temporary nature.

CPI in the UK rose by 0.6% m/m (+5.2% y/y) in September against the growth of 4.5% y/y in August. Obviously, inflationary pressure has soared upward, which affects economy. We would remind that in the outcome of the meeting in October, the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, at the same time increasing volume of the assets repurchase program. Therefore, QE was increased to 275 billion pounds against the previous level of 200 billion pounds. In the follow-up comments the head of the Bank of England Mervin King said that the expansion of the assets repurchase program has been provoked by the slow growth of the global economy, however QE will have a positive impact on the British economy in the future. According to him these measures are preventive since Britain is in the middle of the drastic crisis now.

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