By Matthew Boyle
With inflation falling in the UK, it seems at least for now there will be no further interest rate hikes from the Bank of England. Whilst this is good news for the domestic economy and borrowing markets, the result has hurt GBP exchange rates. With high interest rates attracting foreign investment and the market expecting and pricing in a hike it seems the Pound is once again on the back foot against the Euro, and can provide no defence against the currently frighteningly bullish dollar. Rates have fallen 2% since August against the single currency and 8% against the Greenback which in the same period has steamrolled the Euro by 6%, benefitting from its safe-haven status as uncertainty across markets is at peak levels.
All this while ex-US president Trump awaits trial for fraud, and in the UK Prime Minster Sunak dodges questions on providing troops to Ukraine and whether the Manchester leg of HS2 will be scrapped.
As a flustered Sunak leads a fractured Tory party It seems just a matter of time as to when a general election will be called and with it the possibility, we might see Starmer and the Labour Party leading the UK.
For those of you buying property no doubt this is a stressful time already and this uncertainty will be far from welcomed. Whilst GBP/EUR rates test the lower levels we have seen in recent months, a struggling German economy provides some relief and hope that rates may push up again.
In what is a quiet week of data market sentiment takes over and of course questions as to what happens next? Whilst there is always hope it is without doubt uncertain times for the Pound as it looks currently ready to fall through what has been an established floor of resistance which could well see it drop by 2-3% quickly.
Should you have an upcoming requirement speak to A Place in the Sun Currency today – we can help guide you through these uncertain times and provide you with some options to help reduce the uncertainty and cost of your upcoming transfer.