By Lauren Buckner
The Pound lost some ground yesterday afternoon ahead of this morning’s inflation data, having enjoyed some buoyant winds after last weeks interest rate bonanza.
Following hawkish commentary from the Bank of England around UK interest rates remaining at current highs for an extended period of time, Sterling had been trading towards recent range highs versus the euro and around a two month high against the USD. Although interest rates have been key to the Pound’s success over the past 18 months, the reality is that there is some uncertainty ahead. Economic data has not been positive as house prices continue to fall and GDP flat lined recently, and this uncertainty, coupled with a likely general election in the first half of next year is holding the Pound back.
With inflation at just 3.9pc for November, down from 4.6pc in October it is clear that price rises are coming under control domestically. This suggests that the current monetary policy from the BofE is working to curb the wild price rises earlier this year. The Pound dropped on the back of this news as it questions those recent comments from the Bank of England.
Much uncertainty ahead then for the UK and therefore the Pound, a forward contract could be a helpful tool to fix in costs on your overseas property purchase. Please get in touch with the team to discuss further.