Those of us with a vaguely transatlantic bent have been mentally doubling UK
prices (or halving US ones) for some time, but now it’s official: the
British pound is worth more than $2. British tourists are sending up quiet
thanks to the latest UK inflation report, which hit 3.1% in March, outside the
Bank of England’s target band, making a rate hike very likely. That, and the
perenially-popular carry trade:
"The sky’s the limit for sterling," Simon Derrick, chief currency
strategist at Bank of New York, said in London. "It’s a favorite for
investors because of the rate differential."…
"Sterling is going to keep on rising," said Steven Bell, who manages
GLC Ltd.’s so-called global macro hedge fund. "We have very high interest
rates here in the U.K. and an attractive macro background. I think
$2.10 is the level that the pound will settle at."
This is also good news for US companies doing a lot of business in the UK –
the big financial-services firms spring to mind.