By Paul Newfield
We now have a date for the Autumn budget in the UK, which will be on the 26th of November, and it is expected that there will be several tax hikes across the board for both personal and business rates, as part of the government’s fiscal rules over the “economic cycle”; roughly the next five years.
The impact on the UK economy remains to be seen, but it is predicted that an almost certain negative impact on businesses, should the tax hikes happen, could cause GBP levels against the Euro to crash another 4-5 cents over the next 3-6 months.
Angela Rayner is also in hot water over not paying the going rate in terms of tax on her property purchase, and her job is now in question because of it – which could also cause instability and further volatility for the Pound. Markets hate uncertainty, so this is the sort of thing that could not only plunge the government into further strife, but FX markets as well.
Across the pond and there is an expectation of more evidence of a cooling US labour market, with employers remaining cautious over hiring, due to tariffs and current trade and immigration policies. With unemployment also predicted to edge up to 4.3%; against the backdrop of a potential Federal Reserve rate cut within the next two weeks.
This morning, we have already had a mixed bag of UK data releases, including retail sales, which are overall slightly up on the previous levels, by as little as 0.1%, and house prices which have fallen by 0.1% YOY but up 0.1% MOM so, again, no definitive or clear indication which way things are going…
Later this afternoon, we have the all-important US data; non-farm payrolls, and unemployment figures, which if negative will give rise to further declining GBP-EUR rates, so for those of you looking to buy a property in the Eurozone, this will be the last bit of news this week to keep an eye on.
As for next week we have a quiet few days until Thursday, where we will see what happens with the ECB interest rate decision, associated press conference and inflation figures from the US. Next Friday will see industrial, manufacturing, construction figures, as well as GDP MOM from the UK. With continued uncertainty, stay in touch with your currency consultant, so we can provide the very best guidance we can, and ensure the timing of your transfer and type of payment offered is best for you.