The Pound tumbled against the Dollar this morning, suffering the largest intraday loss in over 15-years following reports that the U.K government nationalised Bradford & Bingley Plc and seized control of the troubled lender, which represents Britain’s biggest buy to let mortgage provider and the U.K’s eighth largest bank.
The UK currency also fell against a basket of currencies, including the Euro as a separate report on UK mortgage approvals painted a grim outlook for the property market with banks approving the fewest number of home loans since records began in 1999.
The crisis in credit has curtailed lending and Bradford & Bingley Plc are just the latest bank to succumb to the credit squeeze following the nationalisation of Northern Rock Plc last week and the move may further undermine UK consumer confidence as the bailout will be funded with taxpayers money.
Elsewhere, the disruption and volatility sweeping through financial markets has seen the U.S government deliberate over the proposed $700 billion rescue plan with some Republicans arguing whether the move would actually help stabilize financial markets.
However, reports this morning indicate that Congressional leaders have finally agreed on the details of the plan with the funds intended to bring some stability back to the market with the government inheriting tainted assets from banks.
Nevertheless, the focus this morning has been the nationalisation of Bradford & Bingley Plc and the Pound has dropped 2.3% already this session, the biggest daily decline since June 4th 1993 while UK government bonds rallied as investors sought the safest securities.
Data Released 29th September
U.K 09:30 Consumer Credit (August)
U.K 09:30 Mortgage Approvals (August)
EU 10:00 EC Business Climate (September)
EU 10:00 EC Economic Sentiment (September)
- Consumer / Industrial / Services
U.S 13:30 Personal Income / Consumption (August)
written by Adam Solomon
Related posts:
- The Pound declines heavily against the Dollar following reports that Bradford & Bingley Plc plunged by the most since the Bank went public in 2000
- The Pound falls to the lowest level in almost two years versus the Dollar amid reports that UK banks repossesed the most home in 12-years
- The Pound declines against the majors following the nationalisation of Northern Rock plc
- The Euro declines against the Dollar amid comments from ECB president, Jean-Claude Trichet
- The Dollar may continue to decline today amid speculation that the Fed will cut interest rates by the most in 23 years
