Sterling starting to stabilise with new PM

By Ashley Finill

Following on from the Autumn statement delivered in the house of commons on Thursday by the Chancellor Jeremy Hunt, Sterling has found some respite from the misery it has been experiencing as a result of the catastrophic fiscal policies released by the former PM Liz Truss. Rishi Sunak had previously warned of the consequences that the UK economy could face with Truss’s plans, and he was proved right. Since coming into office, Sunak’s appointment has brought back some stability in the currency market. It has been a very rocky road for UK politics in 2022 in which we have seen three prime ministers occupy Number 10 with Boris Johnson forced to resign, Liz Truss’s abysmal reign and now Rishi Sunak’s turn to steady the ship and trip to bring back some integrity to the damaged Conservative party ahead of the general election in 2024.

UK Economy Key for Sterling’s Recovery

Rishi Sunak’s top priority is to get the UK’s diminishing economy back on track which is now the worst performing economy of the G7 countries. As we set into winter, gas prices will continue to soar and although a cap has been introduced to help families heat their homes this winter, it will still burn a hole in the pockets of the vast majority. This is likely to influence people’s spending this Christmas, with retail sales down, unemployment increasing and prices for food, energy, and clothing on the rise as inflation hit 11.1% last week, a 41 year high, Sterling could pay the price as we have seen already against the majors. As the pound is trying to recover from record losses on the Dollar and lows on the Euro the economic situation could not be more crucial for Sterling’s fortunes in the currency market. The Bank of England announced a couple of weeks ago that the UK economy is now almost certainly in recession, which is likely to last for the next couple of years. This is due to the recovery from the pandemic and the repercussions of the conflict in Ukraine as Russia cut off the gas supply lines to Europe which has resulted in soaring energy prices, something that is likely to continue as there is no sign of backing down from Vladimir Putin.  These points leave Sterling in a vulnerable position and could see more woes for the pound for the rest of the year and into 2023. If you have a currency requirement before the end of this year and into next it may be worth considering your options and speaking to your currency consultant today.

Data this week


1.30pm – US –    Chicago Fed National Activity Index

9.45pm – NZD – Exports, Imports & Trade Balance


7am – AUD – RBA’s Governor Lowe Speech

1.30pm – CAD – Retail Sales

3pm – EU – Consumer confidence

10pm – AUD – PMI


1am – NZD – Monetary policy Statement & Interest Rate Decision

9am – EU – PMI

9.30am – UK – PMI

1.30pm – US – Durable goods, Jobless claims & Nondefense Capital Goods

2.45pm – US – PMI

7pm – US – FOMC Minutes


9.45pm – NZD – Retail Sales


7am – EU – GDP