By Matthew Boyle
As we near the end of the year it is quiet in terms of economic data. That said, 2024 has been largely dominated by central banks and interest rates as they have battled to combat rising levels of inflation.
Undoubtedly political events have also shaped the last year – elections in both the UK and the US, both seeing a change of government.
Many expected a Labour government to damage the Pound, however GBP/ EUR rates sit close to a 3 year high.
This is primarily due to UK Chancellor Rachel Reeves’ change to government borrowing rules – pushing back expected BoE rate cuts and so keeping the Pound stronger for longer.
Whilst the Pound has remained strong against the single currency it has been a different story against the Dollar. Since the US election the greenback has strengthened across the board and in the past few months gained around 5% against the pound.
And so whilst UK PM Starmer battles increasing media scrutiny and seemingly falling support, the world now awaits Donald Trump to take control in the US, backed by both Republican majority congress and senate.
As we approach the new year markets await interest rate cuts, the Donald and of course Santa visiting again….