By Ashley Finill
This week has been a turbulent one on currency market as data releases from around the world have impacted exchange rates, with sterling and the US dollar being the losers of the week. Sterling’s woes continued as it had been reported earlier this week that the UK is likely now the worst performing economy in the G7. Although a recent reading for GDP has shown growth in the UK economy, other economies in the world also continue to thrive coming off the back of a global pandemic and at a much faster rate than the UK. As a result, Sterling has found it difficult to hold any real strength against the Euro throughout this year with gains being short lived and the fall being heavy when the pound is dealt a blow in the way of data releases and political antics. Talks of a recession in the UK had been on the cards but some growth in the economy can now been seen. However, inflation increased again in February due to a hike in food prices and prices at the petrol pumps seem to also be on the rise which could again increase the inflation level in the UK, with the BoE likely to step in as a result which could spell bad news for Sterling later. Should you have a requirement for Euros it could be a good time to start looking at your options. The Euro currently is currently on the up gaining nearly 10 cents on the US Dollar since the turn of the year. This is a stark contrast to last year as the US Dollar had been the outperforming currency seeing mass gains across the board due to its safe haven status as a currency for investors when the conflict in Ukraine broke out. It’s not all bad news, if you have Sterling and require US dollars as the pound continues to make steady gains on the Dollar.
UK Government Under pressure as Strikes Continue
This week Junior Doctors in the UK started a 4-day strike as they are demanding a 35% pay increase. The government had tabled an offer which had been quickly rejected as both sides of the table are yet to get close to an agreement in increase. Rishi Sunak has been coy on the subject with his Secretary of State for Health and Social Care Steve Barclay handling the issue has said that the pay increase of 35% is not reasonable. These latest strikes have caused disruptions within the NHS which is something the government should want to avoid given the long waiting times and mass pressure on the NHS. The government may look to avoid more turmoil amongst public sectors as Rishi Sunak earlier this week pledged for a general election in October 2024. By then Rishi would have been in office for 2 years (should he still be in number 10) and in that time will be looking to recover the heavily tarnished reputation of the Conservative party stained by the previous occupants of number 10 and their failing appointed cabinet members. As we know Sterling is highly sensitive to political ongoings in the UK so from now until October 2024 the pound is perhaps likely to continue its unpredictable and uncertain journey.