Following the release of this morning’s UK Claimant Count which showed UK unemployment is now at 7.1% this has sent Sterling Euro rates to their highest level since January 2013. Coupled with the release last week of UK Retail Sales which were the highest since 2004 optimism is now surrounding the British economy.
Indeed, with the Bank of England having commented previously that UK interest rates are unlikely to be changed until we see unemployment lower than 7% this could see an interest rate rise needed sooner than first predicted.
The previous prediction for putting up interest rates according to a recent BBC poll was for no earlier than 2015 but personally I’ve felt a predicted on previous posts that I think we’ll see an interest rate rise before the end of 2014.
The news this morning also sent GBPUSD rates to their highest level in three weeks breaking through 1.65 on the mid-market level. The Bank of England minutes which were also published this morning showed a 9-0 vote against raising rates.
With inflation having hit the government target of 2%, UK house prices rising and unemployment falling this is all leading to Sterling’s strength. However, do be cautious as if GBPEUR exchange rates continue to rise at their current trend this could have a negative effect on the UK economy which is heavily reliant on its export market. This time last year when GBPEUR rates were similar we saw a big fall within a matter of weeks. the move was as much as 8 cents or the difference of £5,600 on a currency transfer of €100,000.
If you are worried about exchange rates and want to save money compared to using a bank then contact me directly Tom Holian [email protected]