BoE rate decision inbound

By Luke Dyson

As we enter February, it is likely sterling will begin to see some traction against the euro, in one direction or another, having been stuck in a two cent rangebound market since early January; it is clear sterling’s strength has been lacking.

However this could all change very soon as the Bank of England will be announcing a rate decision Thursday at 12:00. It is believed a rate hike of 25 to 50 basis points is expected.  Which, if this is correct, it is believed sterling could fall further and potentially out of the current range.

The Bank of England aggressively hiked interest rates over the course of 2022, which normally would boost the strength of sterling, however majority of these hikes resulted in sterling moving lower against the euro and dollar. This trend could carry on over the course of 2023.

This was down to two reasons:

1) The Bank of England raised interest rates by an amount smaller than the consensus expected

2) They met the expectations of the percentage hike, however mentioned a soft economic forecast for the future straight afterwards

If you have an up and coming currency requirement please get in touch with your currency consultant today, as these rates we are seeing at present could be very different by the end of the week. Even a small drop in sterling cent of say 1 cent can have a large impact on how much your property will cost.

For example, on a €150,000 transfer if the market dropped one cent you would be looking to pay circa £1,200 more for the same amount of Euros.