Euro property boost tip for Sterling

Sterling is set to rise in value against the euro as the government starts to tackle public sector debt, it has been predicted.

City analyst Duncan Higgins of currency broker Caxton FX said that the pound will benefit from reductions in government spending aimed at balancing the books, something that could in turn make buying eurozone property cheaper.

He stated: "The fragile economic recovery in Britain has struggled to keep pace with its continental counterparts and has been burdened throughout by a deficit which the UK government cannot sustain."

A change in this debt situation will see sterling's value climb to €1.20 by mid-2010, Mr Higgins predicted.

He also suggested an incoming Conservative government after next year's general election could bolster the pound for a short time.

A stronger pound could make it easier to afford property in countries such as France, Italy, Portugal, Spain or Cyprus.

Earlier this week, prime minister Gordon Brown used his speech at the annual conference of the Trade Union Congress to confirm there will be cuts, stating this will focus partly on "lower priority budgets".

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