Bank of England now less likely to raise rates and the impact on GBPEUR rates

Pound Remains Strong Against the Euro as Eurozone Debt Builds

The Pound has once again struggled to make any gains vs the Euro and we are now just a week away from the Bank of England’s next interest rate decision due to be held on 10th May.

Only a fortnight ago the price to buy Euros had hit its highest level since May 2017 almost breaking past 1.16 but since then we have seen a 3 cent drop on GBPEUR exchange rates as it appears now much less likely that we’ll see a rate hike coming next week.

UK GDP data for the first quarter of 2018 came out late last week at the slowest pace since 2012 and this appears to have decreased the chances of a rate hike coming in the near future.

Inflation is still high at 2.5% which fell quicker than expected and although it is falling it is still higher than the target which is 2%.

With this in mind I don’t think that the Bank of England will completely rule out an interest rate hike but I think owing to the recent poor economic data then I think next week’s decision could be to keep rates on hold and therefore the Pound could fall further.

The Brexit is still causing global investors to shy away from Sterling at the moment and with the Eurozone GDP data higher than the UK then I think we could see a rocky road ahead for the Pound vs the Euro.

Having worked in the foreign exchange industry for one of the UK’s longest established currency brokers for 15 years I am confident of being able to help you save money when buying currency as well as helping you with the timing of your currency purchase.

For further information or for a free quote then contact me directly by sending me an email and I look forward to hearing from you.

Tom Holian