New highs for Pound – but uncertainty ahead

By Tom Arnold

The Pound reached new two-year highs last week, as the lack of Covid restrictions helped the UK economy, along with the December interest rate rise and likely future interest rate rises (to curb inflation) also giving exchange rates a boost.

However sterling is extremely vulnerable to political issues – will there be a change of Prime Minister in the short term? The report into lockdown parties at the heart of government is due to be released in the coming days. Will Boris live to fight another day? If not, we could see the Pound suffer as what was not very long ago a stable government with a large majority, could give way to a power vacuum and inevitable calls for a General Election from opposition benches.

The February interest rate rise in the UK is also far from certain, but the likelihood has helped the Pound stay strong. With so much coming up in the next few weeks, both politically and economically, and the Pound having hovered at its current levels for much of January, which way will the next big move be for exchange rates? We are probably about to find out, so stay in touch with A Place in the Sun Currency if you would like us to update you as things develop.

Data this week


EU Manufacturing PMI

EU Services PMI

UK Manufacturing PMI

UK Services PMI

US Manufacturing PMI

US Services PMI


Australian CPI Inflation

US House Price Index

US Consumer Confidence


US New Home Sales

Canadian Monetary Policy Statement inc Interest Rate Decision

US Fed Monetary Policy Statement inc Interest Rate Decision

NZ CPI Inflation


US Durable Goods Orders


US Initial Jobless Claims


German GDP

EU Consumer Confidence