As previously written about in a number of articles it was clear that the Bank of England were due to raise the base rate to 0.5% which was the first interest rate hike in a decade and this also returned interest rates back to where they were immediately post-Brexit.
However, although the interest rate was increased the rhetoric in the minutes as well as the accompanying press conference was dovish to say the least.
Two members still wanted to keep rates on hold at the historically low levels whilst the others were almost backed into a corner owing to rising inflation which has recently hit 2%.
Bank of England governor Mark Carney also stated that interest rates may go up only twice by the end of 2020 which is hardly anything to get excited about if you’re looking to invest in the Pound in the future.
The reason for this statement was also partly due to the ongoing concerns caused by the Brexit vote and at the moment the talks are still stalling.
Thursday was seen by many as an opportunity to buy Euros or US Dollars at a higher rate but as predicted the Pound fell owing to the dovish statement.
With limited opportunities for Sterling strength the only really catalyst is likely to come from better and more positive Brexit talks but as the next talks are not due to held until later in the year I think we’ll continue to see the Pound under pressure for quite some time to come.
Therefore, if you’re looking at buying Euros or US Dollars in the next few weeks it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date.
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 I can.