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Where the United Kingdom economy is relatively unchanged, a sudden upward trend in US inflation and a sudden increase in US interest rates would bring

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Where the United Kingdom economy is relatively unchanged, a sudden upward trend in US inflation and a sudden increase in US interest rates would bring pressure to bear on the pound's value because of its effect on foreign trade". But the upward trend in U.s. interest rates brings downward pressure on the pound value because of its effect on capital flows. In case interest rate and inflation decline or depreciate over time, the global capital flow must adjust dramatically, resulting in a drop in the budget for capital spending, currency, stocks, and bonds. Given the possible upward pressure on the pound due to the potential trade change balance, some investors can expect to see the Pound. Instead of trying to leverage on higher US interest rates (if US interest rates are increasing as expected), British investors can be discouraged. Although there is no reason to expect a depreciation of the pound if the uncertainty about the future exchange rate discourages British capital flows into the US

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