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Pound 'has gained ground in recent months'

Pound 'has gained ground in recent months'

The performance of sterling against the euro has picked up in the last few months, experts have stated.

According to HSBC, the single European currency has endured a "difficult" six months.

This, it said, has enabled the pound to "gain ground" on the euro, even though the UK has been experiencing its own economic problems during this period.

Indeed, the country is still languishing in its first double-dip recession for more than 30 years and the prospect of a substantial recovery remains some way off.

James Yerkess, head of FX at HSBC, noted that currency markets around the world are becoming more and more nervous about the outlook for the euro.

This, he said, has been fuelled partly by the opposition to the European bailout programme in Greece, which was highly apparent during the country's recent general election in particular.

Mr Yerkess noted that the tax hikes resulting from the programme are particularly unpopular, as are the spending cuts being implemented by the Greek government.

While he stated that sentiment surrounding Greece has improved slightly since May, fears concerning Spain are becoming more widespread.

He said concerns have been "centred on its weakened banking system in the wake of a bust property bubble and ongoing recession".

"Policymakers responded to stabilise the situation, but with less haste and aggression than the market would have liked," Mr Yerkess commented.

This comes after the European Central Bank (ECB) announced its intention to set up a bond buying programme in order to help tackle the continuing debt crisis in the financial bloc.

Mario Draghi, president of the organisation, believes this will act as a "fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area".

The move has already been commended by Skandia, which said it demonstrates the ECB's commitment to securing the future of the eurozone.

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