Uncertainty builds for Pound’s future value

By Luke Dyson

Following on from busy economical data releases last week, we have seen the Pound given a drastic amount of uncertainty moving forward over the next few weeks as to whether its current strength will hold.

The European Central Bank held an interest rate decision, which didn’t result in any change to exchange rates as of yet. However the ECB announced it would be increasing interest rates further in July by 0.25% and then again in September by 0.5% . These rate rises will now act as a buoyancy device for the euro and should support the euro’s strength moving through the rest of 2022. Although this isn’t negative news for the pound directly, we could see some real damage done to the GBP/EUR pair if the euro begins to gain traction.

It isn’t just plain sailing for sterling either. The UK has a couple of issues that it still needs to get resolved shortly before we see some real damage done to the pound. The inflation rate is over 9% at present with it rapidly growing and has been predicted to hit up to 15% by the end of the year. Fuel prices are also on the rise with expectations now for over £2.00 per litre of petrol. There is a massive strain on the cost of living, as consumers cannot keep up with the cost for commuting to work but also price increases for commodities such as food due to transportation costs.

If you are looking to make an up and coming transfer in the next few weeks or months, consider taking advantage of the current rates as sterling still holds its strength for the time being. With the Eurozone increasing their interest rates over the next few months and the ongoing issues with inflation in the UK we could see some drastic changes for the GBP/EUR rate, potentially costing you significantly more for a property purchase in comparison with buying euros now or a month down the line. Please get in touch with A Place in the Sun Currency today to see what strategies we can offer to help limit your currency exposure in this uncertain time.

News releases this week

14-06-2022 -GBP 07:00 Claimant count change

-EUR 10:00 German ZEW survey

16-06-2022 -GBP 12:00 BOE vote hike

17-06-2022 -EUR 10:00 euro zone CPI