It is possible to place spread bets and contracts for differences on interest rate performance, and it is expected the Bank of England will raise interest rates by February. Spread bets and CFDs should consider favouring this possibility. Reuters reports on British interest rate performance:
Sterling hit an eight-year high against the low-yielding yen on Friday and was on track for its biggest annual rise versus the dollar in more than 15 years, thanks to growing expectations of more UK rate hikes in 2007.
The British Bankers' Association said mortgage approvals rose 9.1 percent in November and new mortgage lending hit a record high of 6.7 billion pounds.
The data add to a run of recent upbeat releases on housing, suggesting two interest rate rises from the Bank of England this year have done little to cool the property market.
Strong data from the UK have boosted market expectations of another quarter point BoE hike to 5.25 percent in early 2007.
"Assuming that we see decent retail sales figures over the Christmas and new year period, which I think we will, then I think we are heading for a February rate hike and that will continue to push sterling up," said Adam Cole, senior currency strategist at RBC Capital Markets.
