As predicted in one of my previous articles I thought the Euro would continue to strengthen which was proved correct when the Bank of England confirmed that interest rates would be kept on hold for the 11th month in a row.
The split back in June was for 5-3 in favour of keeping rates on hold but this month’s decision was for 6-2. One of the members of the MPC who did vote for a rate hike was Kristin Forbes but she has been replaced and the incoming Silvana Tenreyo was unlikely to come in with a controversial rate hike at her first meeting.
This has led the Pound falling to its lowest level to buy Euros since Autumn 2016 and prior to that the Euro is at its highest rate to buy Pounds since October 2011.
The uncertainty caused by the Brexit situation has caused a lack of investment in the UK and until things are resolved I think the Pound could continue to struggle for quite some time.
Another problem is that prices are rising whilst wage growth is behind the curve meaning that the cost of living in the UK is rising. This has led the Bank of England to cut the growth forecast from 1.9% to 1.7% for 2017 and from 1.7% to 1.6% next year.
On Tuesday the latest NIESR growth estimate is due out for the last three months and I can only see this coming out lower than the previous three months and therefore I expect to see further Euro strength vs the Pound towards the start of next week.
If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency.
A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on email@example.com and I will endeavour to get back to you as soon as I can.