The Pound vs the Euro has hit its best level to buy Euros in two months at the end of the week after the Bank of England confirmed a 7-2 split in favour of keeping interest rates on hold.
The central bank did state that it may be ready to increase interest rates than the current expectation and potentially as early as November according to some analysts.
However, I think this was a case of using their influence to suggest some thing might happen rather than actually making a change to interest rates in the near future.
The real concern is that of rising inflation which has hit a 5 year high in part caused by the low exchange rate for the Pound vs the Euro and Pound vs the US Dollar.
If you think how much we import from overseas we are seeing products sold in the UK suffering from ‘shrinkflation’ which is a term for keeping the price the same but reducing the size of the product. Owing to the rising costs of raw materials this is affecting the UK consumer.
Indeed, with inflation rising quicker than UK average earnings this is causing a big disparity and if you think about how many people in the UK also have mortgages then to raise interest rates in the near future in the UK could be catastrophic to UK economic growth.
Therefore, this is why I think this gain for the Pound could potentially be short term and could be worth taking advantage of during the early part of next week.
Om Friday 22nd September Prime Minister Theresa May will be speaking in Florence about the UK ‘leaving the EU but not leaving Europe.’
This could be crucial to how Sterling exchange rates moves so make sure you keep a close eye on the currency markets as we could see big swings depending on what she says.
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 protected] and I will endeavour to get back to you as soon as I can.