Morning Forex Fundamental: GBP

Morning Forex Fundamental: GBP

'I think that during the course of 2013 we will see the recovery come into sight' - Bank of England Governor Mervyn King

The U.K. economy is expected to start recovering after a slump in 2012, the Bank of England Governor Mervyn King said on Friday. The only holding factor is the deepening debt crisis in the Eurozone, Britain’s biggest trading partner. The report also showed that the Bank of England and its policy makers are not trying to talk down the Pound, while acknowledging that the debasement of the nation’s currency since before the financial crisis has helped exports. In the meantime, the BoE is widely expected to announce the increase of asset purchase programme, which currently stands at 375 billion pounds. During the previous month’s meeting, Mervyn King has already voted to increase quantitative easing by 25 billion pounds, adding to signs the BoE will soon inject more money into the struggling economy.

'I think that during the course of 2013 we will see the recovery come into sight,' he said. 'If you take away what happened in the North Sea oil production and in construction, the U.K. economy even last year grew by 1.5%. There is momentum behind the recovery that’s coming.'

'The markets determine the level of exchange rate, not us,' King said in an interview with ITV News yesterday, according to a transcript of his remarks.