The reason for the fall to a nine month low?
Some traders are pinning it on Thursday’s poor business investment figures
That release seems to have put paid to hopes that there could be an upward revision to GDP on Friday, according to Howard Archer of IHS Global Insight.
The business investment data for the fourth quarter of 2009 are truly dire.
The substantial fall in business investment in the fourth quarter of 2009 is a horrible surprise and extremely disappointing. It dilutes hopes of an upward revision on Friday to UK GDP growth of 0.1% quarter-on-quarter in the fourth quarter of 2009 and even raises the spectre that this minimal growth could be revised away. Furthermore, the sharp overall and ongoing decline in business investment could threatens to have significant long-term damaging repercussions for the economy’s potential output.
Not only did business investment fall quarter-on-quarter for a sixth successive quarter in the fourth quarter of 2009 but the rate of decline picked up to 5.8% from 1.8% in the third quarter. Consequently, business investment was down by a record 24.1% year-on-year in the fourth quarter and contracted 19.0% overall in 2009.
That’s right, its “raises the spectre that this minimal growth could be revised away”.
Which would be music to the ears of Jim Rogers, who for the umptenth time in recent memory, is predicting…guess what? A sterling crisis.
From a press release for the Global Trading Day Seminar, which takes place in Westminster next month.
POUND COULD COLLAPSE WITHIN WEEKS, PREDICTS BILLIONAIRE FINANCIER JIM ROGERS
The UK Pound is on the brink of a collapse which will herald a downturn worse than 2008/9, it could well happen within weeks and the British government is powerless to prevent it. And this in turn will foreshadow a global economic winter that could come before the end of 2010 and make the last two years seem like a mild spring day.
“Other currencies aren’t strong and the Euro has real problems, with cracks much wider than Greece beginning to show,” Rogers continues, “but it’s the Pound that’s most vulnerable. In real terms, it’s already devalued against virtually every currency barring the Zimbabwean dollar and it’s especially exposed over the weeks running up to the UK election. In a basket of currencies, the Pound is potentially a basket case. And that will put Britain in an extremely bad position for the shakedown.”
Please stay awake at the back.