Will the Bank of England raise interest rates in May?

The Pound has recently hit the best levels to buy Euros in almost a year as the talks of an interest rate hike are gathering pace. The Pound did drop a little vs the single currency during the middle of the week but still remains close to the highest rate to buy Euros since May 2017.

UK inflation levels fell from 2.7% to 2.5% but they are still higher than the Bank of England’s target of 2% creating more reasons for an interest rate hike. Average earnings are higher than inflation levels and this has helped to boost consumer confidence.

Bank of England governor Mark Carney came out on Thursday night to suggest that an interest rate hike may not be coming as soon as many expect but MPC member Michael Saunders came out on Friday afternoon to reassure the markets that he would be likely vote in favour of raising interest rates. Indeed, he is one of the two members at the last vote to want to increase interest rates.

Although we have seen Retail Sales fall in the UK this is likely to be because of the heavy snow which caused havoc for the UK recently. With unemployment close to record low levels and average earnings above inflation I think the Bank of England have enough justification to raise interest rates in the near future and the main question is whether they will raise rates in May.

My prediction is for a rate hike next month which could give the Pound some further support against a number of different currencies including vs the Euro. Therefore, if you’re looking to sell Euros it may be worth doing this prior to the 10th May when the next Bank of England monetary policy meeting takes place.

Having worked for one of the UK’s leading currency brokers for 15 years I am confident that I can offer you bank beating exchange rates as well as helping you with the timing of your currency transfer.

If you have a currency transfer to make and would like further information then please email me with your specific requirements and I look forward to hearing from you.

Tom Holian [email protected]