By Leigh Smith

During the course of yesterday the pound strengthened across the board on the back of positive data for UK house prices and inflation. Inflation rose to 1.9% from Octobers figure of 1.5% and the RICS survey showed increased house prices for the fourth month in a row. Both were seen as positive for the UK and Pound.

However, it may be worth noting, back in 2005 the UK was the world’s fourth largest economy, we are currently seventh and it is being predicted that countries high in natural resources would overtake the UK over the coming years. When this fall is compared with Sterling exchange rates, it seems no wonder that some analysts are predicting the possibility of parity with the Euro and GBPUSD exchange rates potentially falling to 1.40.