Pound Gains as Number of Business Insolvencies Decline

The Great Britain rose against the US dollar yesterday and continued to gain today as the number of UK business insolvencies fell last month. The sterling was also higher against the Japanese yen, but dropped versus the euro.

Experian Plc reported that the number of business insolvencies dropped 3.1 percent in September from a year ago to 1,679 companies. Max Firth, the managing director at Experian Business Information Services, commented:

Overall insolvency figures are down and the picture remains stable, which is encouraging. In addition, we’ve seen real pockets of improvement, such as in the West Midlands and South West, which have both seen a drop of over 30 per cent. Also encouraging are the lower rates of insolvencies among some of the small firms. However in contrast, larger firms experienced a slight increase in insolvencies, which may lead to smaller firms that were supplying to them, experiencing a knock on effect.

The sterling was also firmer on fundamental data, which suggested that the UK economy is slowly emerging from recession. This week’s report is expected to show that Britain’s gross domestic product expanded 0.6 percent in the September quarter from the previous three months.

GBP/USD rose from 1.6012 to 1.6014 as of 1:06 GMT today. GBP/JPY climbed from 126.89 to 127.97 yesterday and remained near that level today. EUR/GBP was up a little from 0.8151 to 0.8153 today.

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