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At the Forex currency market on Monday morning, the British Pound Sterling rate continues upward trend which started last week; while investors regain from previous sales, the Pound has time to recover too; regardless internal situation in the UK. 

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area is moving along the signal line,   not giving a clear signal. Stochastic Oscillator goes up in the neutral zone, and is giving a buy signal.

Forex recommendations: in case of break down at the level of 1.6320, the pair will go to 1.6340 and 1.6360. If upward breakdown does not take place, the pair will consolidate close to the current levels.

It became known today that house prices in the UK fell by 2.1% m/m (-0.3% y/y) in August, as per Rightmove estimates.

Earlier, Prime Minister Cameron recalled the Parliament in order to proceed to work this Thursday, mainly because of the escalating situation in the country. This is a precedent. Parliament had been summoned from vocation only twice in the last decade in 2001, when there was a terrorist attack in the U.S. and in 2002 when Britain joined military campaign against Iraq.
 
The head of the Bank of England, Mervyn King stressed earlier in his speech that current anxiety in the markets is the result of the irritable situation with the debts in the U.S and Eurozone. Regulator downgraded his forecast for the world economic growth and noted that outlooks for the growth in the British GDP are also decreasing. According to him, downside risks dominate in the British economy now; in 2012 the country can only expect modest economic growth, because economic problems aggravate nearly every day. British economy has already faced downfall in the volume of lending and free financing and regulator does not rule out that the rate might be increased “one day”, however monetary policy shall remain flexible. The meeting of the Bank of England was as usual brief and concise: the rate was left at the level of 0.50% per annum, package of public bonds redemption was also left unchanged, in the amount of 200 billion pounds. No special comments have been made: British regulator continues to adhere to the old monetary policy.   

British monetary politician Mr. Osborn said yesterday that collapse of the Eurozone would be economic disaster for both Europe and Great Britain. He said that the UK strictly implements the plan to reduce budget deficit; however the world politicians should act be more effective and vigorous to prevent imbalance. We would remind that rating agency S&P said last week that rating downgrade is not a threat for Great Britain.

It also became known earlier, that index of PMI CIPS in the UK construction sector increased to 53.6 points in July against the forecast of 53.0 points. In June, CPI in the UK fell by 0.1% m/m (4.2% y/y) against the forecast of growth by 0.2% m/m. Earlier, Confederation of British Industry- CBI has reduced GDP forecast for the current year to 1.3% against the forecast of 1.7% in May. According to experts, sovereign crisis in Europe, debt problems in the U.S. and Japanese disasters will not enable British economy to strengthen considerably. Meanwhile, preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2.

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