By Ashley Finill
It’s been a shaky couple of weeks for the Pound. Last week it managed to pick up some momentum, gaining on both the Euro and the US Dollar, however this week those gains have almost completely disappeared, showing just how fragile the currency has been through most of 2025. The main factor is the poor performing UK economy and the ongoing cost-of-living crisis. With households forced to spend more on basics like food and energy, there is less money going into other parts of the economy that would normally give it a boost. Also, inflation has proven difficult to bring under control, as this week the figure came in higher than expected, leaving the Bank of England in a tricky position as it tries to balance high prices with a slowing economy.
Bleak Outlook for the Pound
It is now expected that due to the recent interest rate cut, there may not be any further cuts until at least December, according to former BoE Member Andrew Sentence, who recently spoke on current matters in the press. He said “the perverse rate cut earlier this month looks even more ridiculous and irresponsible in the light of this news of higher inflation”. He didn’t stop there with his scathing views on the current situation with the economy, as he has warned that the Pound is facing comparisons with Britain in 1976’s currency crisis due to the “dangerous” mix of high inflation, weak growth, and fiscal stress. He referred to 1976 and said “She (Rachel Reeves) has massively boosted public spending, borrowing and taxes, fuelling both demand-pull and cost-push inflation”. Sterling could be put under further pressure in the next couple of months, as Rachel Reeves is due to announce her fiscal plans for the next year, as the budget will be announced around the end of October, and talks of tax increases are already being rumoured, which goes against their original manifesto. This could bring political uncertainty and ultimately hurt the Pound. With the Pound’s future as ever uncertain it may be worth getting in contact with your currency consultant to discuss your options.
Forward Contracts
Our popular forward contract option could be of interest amid the current uncertainty for Sterling, you can lock in at today’s rate with only a 10% deposit, giving you peace of mind in knowing you’re within your budget and crucially removing the risk of the market going against you during the time of the completion on your property. As we have seen throughout 2025 not just with the UK economy and politics, but also with Donald Trump sending the markets into chaos earlier this year with his tariffs, Warfare in Ukraine and the Middle East, Sterling remains in a vulnerable position. A forward contract is a great way to remove your exposure to the currency market and give you peace of mind on what you have budgeted for. Speak to your currency consultant today, should you want to take advantage of the current highs and to go through your options