Autumn Statement and impact on Sterling exchange rates
The eagerly anticipated Autumn Statement was released yesterday which had the effect of calming the currency markets, much to the relief of anyone looking to buy Euros or buy US Dollars at the moment.
The statement included increased tax rates as well as a curb in public spending in an attempt to fill the void in public finances that the UK faces.
A stark warning was also given by the Office for Budget Responsibility as it warned that households could face a drop in disposable incomes by over 7% over the course of the next two years.
Clearly this is a big concern for the UK economy but compared to the disastrous mini-budget which caused a big loss for Sterling exchange rates it could be viewed as a more responsible budget as well as acknowledging a problem.
Therefore, with a more manageable statement it could be argued that this could indeed help support the Pound.
Already this morning the Pound vs the Euro and the Pound vs the US Dollar has started to see a fightback compared to a slight drop in value during yesterday’s trading session.
Chancellor Jeremy Hunt was quoted yesterday as saying ‘none of this is easy, but it’s the right thing to do’.
By the Chancellor announcing the plans as to how to tackle the next few years whilst in government we could see some further support for the Pound as we end the week.
When we turn the focus to both the continent Europe is having its own struggles with high inflation combined with lower growth.
With so many economies that the European Central Bank has to cope with it is clear that in order for them to raise interest rates as quickly as the UK and US this is much more problematic.
If you have a currency transfer to make and would like a free quote compared to using your bank then contact me directly and I look forward to hearing from you.
Tom Holian [email protected]