The Pound Sterling to Indian Rupee (GBP/INR) exchange rate took a tumble on Wednesday after the Office of National Statistics (ONS) showed that fourth quarter UK economic productivity slowed by 0.2%.
The level of productivity is still remaining below pre-global financial crisis levels and the news was enough to cause the Pound Sterling exchange rate to decline against a host of other majors.
Tuesday had shown that the UK economy was recovering at the slowest pace since the 1920s and per person, Gross Domestic Product (GDP) continued to be weaker after the Great Recession than it had been before.
Chancellor to the Exchequer George Osborne stated: ‘Today we’ve had a hat trick of good news about the British economy and with 37 days to go to the election it’s another sign that changing course would put recovery at risk.’
‘We’ve had a significant upgrade to GDP, the highest consumer confidence for over 12 years and confirmation that living standards are higher than they were at the last election. This is good news for families and businesses across the country.’
ONS Productivity Data Sees Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Sink
However, despite the 3.0% annual fourth quarter GDP figure, productivity is struggling. The ONS stated that lethargy in productivity was ‘unprecedented in the post-war period’.
Meanwhile, the Indian Rupee was offered little support on Tuesday when Indian Infrastructure Output fell from 1.8% to 1.4% on the year in February—a four month low.
The infrastructure makes up around 38% of India’s industrial output and is therefore able to impact the Rupee quite significantly.
However, upbeat growth forecasts have helped to keep the Rupee steady in recent weeks.
Industry expert N.S Venkatesh commented: ‘In the emerging market space, India is one of the best shining stars and that’s attracting a lot of capital inflows. The currency has been stable with the current account and fiscal deficits being managed well and that has put India into a big sweet spot.’
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast
The Pound Sterling to Indian Rupee (GBP/INR) could fluctuate on Thursday with the release of Markit’s UK Construction PMI. The figure is expected to dip from 60.1 to 59.8 in March and could be an event to pressure Sterling lower.
The Indian Rupee to Pound Sterling (GBP/INR) exchange rate is trading at 0.0109. The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is trending in the region of 92.0140.
Jeremy
Will the GBP value drop against the INR like this for the next few months?