After the Bank of England Governer Mervyn King talked down the prospects of the pound again today it looks increasingly likely that the bank of England will extend QE next Thursday which could really weaken sterling exchange rates. However much will depend on the outcome of the two day EU summit which has so far been rather mixed. If European leaders can come up with credible plans to present to the market then I would expect sterling to slide next week in the run up to Thursday. On the other hand, if the markets view the latest moves as another damp squib then any losses for the pound could be tempered by euro weakness. Expect a lot of volatility early next week because of this much like the market was in the last 2 days with a 1.5% swing in GBP EUR rates.
Interestingly with Barclays miss-selling King said “From excessive levels of compensation, to shoddy treatment of customers, to a deceitful manipulation of one of the most important interest rates and now news of yet another miss-selling scandal we can see we need a real change in the culture of the industry.” If you would rather have a broker looking out for your interests to get the best exchange rate rather than a bank please feel free to e-mail Colm at [email protected] and quote erf in the subject matter.