GBP exchange rate against the Euro set to reach 1.35 by July.

Euro Zone Mulls Another Greek Bailout Package.
Yet again, Greece is making headlines in the Euro Zone with the prospect of another bailout required to ensure the beleaguered country does not default on its debt obligations. It was one year ago this month that Greece accepted a 110 billion Euro loan from the European Union and International Monetary Fund as its enormous debt burden of almost 330 billion euros threatened not only Greece itself, but the stability of the Euro Zone collectively. Although many believed Greece’s liabilities to be too great to avoid “restructuring” or an inevitable default at some point in time, policy makers have stood firmly behind the country with affirmation and commitment to fiscal austerity never seen before by the country.
Officials are now faced with the difficult task of how to fund a second round of handouts for Greece, which is estimated to be north of 60 billion euros to fund the budgetary gaps for 2012 and 2013 alone. Fitch, the international rating agency, has stated in a report that 90 – 100 billion is likely required to “give sufficient time to implement reforms and cut debt”. Markets have becoming increasingly doubtful of Greece’s ability to solves its debt burdens with reluctance from Germany, Finland and the International Monetary Fund all wanting long term commitments from Europe before more aid will be provided. With 10-year Greek bonds currently yielding 16.4% - over double what yields were during the bailout, the market is making it clear that confidence is lacking.
Many options including private sector involvement and a proposed pact between private and public institutions, similar to the “Vienna Initiative” after Hungary received an IMF bailout in 2009, are being considered. Fitch has made it clear that any extension of Greece bonds beyond their maturity will be treated as a default scenario so expect European officials to be focusing on tackling Greece’s woes in the coming weeks.