Weekly Cypriot Pound Rates and Comments - 16th July 2007

The Bank of England Limited voted by 6 to 3 to increase UK interest rates at the their last meeting. There is still inflationary pressure in the UK system, which is being exasperated by increasing oil prices, and which will be difficult to curtail without even higher UK interest rates. Another increase in UK interest rates is expected by the end of the year.

 

The Cypriot £ has pushed up to CY£0.865/£1 inter bank. The Cypriot £ is pegged to the Euro and as such moves in line with the Euro vs. sterling. The Euro has been supported by upward revisions to first quarter gross domestic product growth and healthy industrial production in Euro land. The European Central Bank is expected to increase interest rates in September to keep on top of inflation.