By Grace Smyth
This past week the Bank of England reported the UK is set to face a prolonged recession and a “very challenging path ahead” as the economy isn’t set to see any growth until mid 2024. Unfortunately recent events do not paint a positive picture for the UK, and predictions for rising unemployment, coupled with increased mortgages and energy costs have meant consumers are spending less and this is only likely to continue as we enter into the colder months. The rising cost of living will inevitably tighten the purse strings and we could see consumer spending take a hit.
Recent weeks have seen sterling move in peaks and troughs, and investors have reported they expect rates to continue to fall against its majors over the next 6 month period. The next short term pivotal event for the pound will be the Autumn statement on the 17th of this month where the Chancellor will divulge on the government’s plans for its fiscal policy. Certainly one to watch!
The week ahead has very little to note for Monday with only a couple of speeches from Fed members Collins and Mester in the evening. Tuesday Morning BoE’s Pill speaks at 09:00 and Eurozone Retail sales post at 10:00. Wednesday is quiet with again speech’s from both Fed And BOE members. On Thursday the focus is on the US with various release throughout the day including Consumer price index, Jobless claims and monthly budget statement. Friday rounds off the week with UK GDP, Industrial and Manufacturing PMI early doors at 07:00am. Eurozone release their economic growth forecasts at 10:00am and US consumer sentiment at 15:00.
Although last week’s hit on sterling wasn’t welcomed by those looking to spend it, there is always the opposite end of the spectrum and it has provided a nice opportunity for those looking to buy it back. These next few months into the new year are likely to see the rates continue this dance of moving within a tight 1-2 cent range so to keep more in control of your exchanges and transfers get in contact with your designated account manager and ask us about the options we provide to help you lock in your currency requirements that best suits your needs and timescale.