New York, New York (PressExposure) October 27, 2009 -- "Mann International": Any lingering hopes that the United Kingdom would be in a position to withdraw from its program of quantitative easing were dashed after data released by the Office for National Statistics (ONS) showed that Europe's second largest economy remained mired in recession for the sixth straight quarter.
Broad consensus among economists had expected the UK's beleaguered economy to emerge from its recession with modest growth of 0.2% but the ONS figures showed that GDP had actually contracted by -0.4%. The foreign exchange markets immediately rounded on sterling which plunged to as low as $1.6384 against the US dollar.
Analysts at "Mann International" said that the news came as no surprise to the Asian-based investment boutique which has remained skeptical of speculation that the UK could feasibly withdraw its bond purchase scheme at the next meeting of the Monetary Policy Committee in November.
A source close to "Mann International" said the firm felt that economists needed to come to terms with the fact that nations such as the UK and the US with their deeply indebted consumers could not "tinker" their way out of recession by simply throwing money at economy. The source added that consumers would only start spending again when they were "good and ready".
As the data sunk in, the "Mann International" source suggested that sterling faced challenging times ahead on the foreign exchange markets as traders took the disappointing figures as a signal that the BoE would increase QE and further devalue the currency.