The pound was severely knocked of its perch this morning after inflation in the UK fell to 1.6%. We saw GBP/EUR hit a low of 1.2458
This is negative for sterling as it gives the Bank of England more scope in not having to raise interest rates sooner. Interest rates are one of the biggest factors in what effects the exchange rates and inflation is a big factor on when interest rates may go up. The sooner interest rates rise the stronger the pound should be (theoretically speaking) We are not expecting interest rates to go up before next year now but tomorrow we will learn if any members of the Bank of England voted for a change in interest rate policy. Now should just one member of the central bank vote for interest rates to rise then we may see the pound recover todays losses. If no members have voted for a rate hike then the pound could continue to weaken effecting your purchase.
The next week or two may bring about some good opportunities to sell the Euro against the pound as we still expect the pound to be fairly strong as we head closer towards 2015. If you require buying or selling the Euro against the pound then please do feel free to contact myself Ben Amrany at [email protected] and I can explain the options available to you regarding your requirement.
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