Pound Up On Bailout Plan

The Pound has pushed back above $1.7200 after hitting a five year low of $1.6779 last week on the news that the U.K. government will bailout RBS, HBOS and Lloyds with 37 billion pounds. The continued nationalization of the country’s largest lenders comes after the G7 meeting this past Friday where leaders of the world’s richest nations vowed to do whatever it takes to stem the current crisis.

Meanwhile, producer prices in the country continued to ease for a second month, falling 0.3% in September following Augusts’ 0.7% drop on lower oil prices, leaving the door open for more rate cuts from the BoE which may cap the Sterling gains going forward.

At 11.45am BST sterling was $1.7237.