Bank of England strengthen the pound

Earlier this afternoon the Bank of England provided a considerable spike in the market for clients that are looking to purchase a foreign currency with the pound. Interest rates will left on hold at 0.5%, however there were signs that an interest rate hike will occur sooner than many forecasters are predicting.

The Bank of England’s inflation report suggested that the worrying wage growth numbers which improved last month, should continue to improve over the next 12 months and a survey by the Bank of England showed private sector companies expect to increase the pay for their staff by approximately 3.1% this year.

In regards to inflation, the Bank of England are forecasting that the high inflation levels that reached 3.1% at the high this year, are set to decline for the remainder of the year back towards the 2% target. As I believe the pound is going to have a good year and believe the Bank of England will raise interest rates at some point in the summer, I completely agree with the prediction.

The Governor of the Bank of England provided his monetary policy statement shortly after the interest rate decision and inflation report.  He confirmed that the UK jobs market will continue to remain strong, and unemployment will remain at a four decade low. Furthermore he went on to suggest that global growth will continue to have a positive impact on the UK economy which is another reason the pound increased in value.

Here at poundsterlingforecast I help clients to achieve exchange rates that the client cannot achieve with their own bank whilst providing regular economic information which helps the client make informed decisions. For example, I wrote an article on Sunday suggesting that the pound would finish the week on a high off the back of the interest rate decision and many of my clients have traded today on the back of the spike. Feel free to click here to read Sunday’s article.

Tomorrow we are set to receive a Brexit announcement from UK Prime Minister Theresa May. Earlier in the week she confirmed that the UK would be leaving the customs union and single market. I expect the PM to continue with this stance, but also announce negotiations have been successful. I’m not expecting major movement tomorrow.

When buying or selling pounds for a business transaction, property purchase/ sale or simply a one off transfer, it’s important to get two factors right before you make the conversion. Firstly to choose a brokerage that offers fantastic rates of exchange. The currency company I work for has won awards for the rates and the service we offer. Secondly, understanding factors that impact exchange rates is important, as this will help you to make an informed decision of when to purchase.

If you are making a currency conversion in the upcoming weeks or months, I would recommend emailing me with the currency pair you are converting (GBPEUR, GBPUSD) the reason for your transfer (business transaction, property purchase) and the timescales you are working to and I will respond to your email with my forecast and the process of using our company drl@currencies.co.uk.