Pound Euro Rates fall after UK Interest Rate Decision
The Pound Euro exchange rate fell from its recent monthly highs of above 1.14 into the 1.11 levels shortly after the interest rate announcement made by the Bank of England.
The current rate of UK inflation is at 10.2% but the central bank are expecting interest rates to fall to as low as 5.2% towards the end of 2023.
Although petrol prices at the pumps have started to fall recently, wholesale gas prices still remain relatively high.
This is keeping the costs of goods and services high which in turn is causing inflation to remain much higher than the target set by the Bank of England which is just 2%.
European Central Bank Increases Interest Rates
Meanwhile, on the continent the European Central Bank continued with their current monetary policy of raising interest rates.
The ECB raised interest rates by 0.5% earlier on today and they have also confirmed that they will be raising interest rates once again by 0.5% in March.
The ECB have been very slow in raising interest rates compared to both the US & UK.
Whilst the US increased interest rates rapidly during 2022 this has caused inflation to finally get to more normal levels.
Meanwhile, UK inflation still remains high but the Governor of the Bank of England Andrew Bailey has suggested that inflation will start to fall as we move further into the year.
Later today we will see the release of the latest US unemployment data due out in the afternoon.
As the world’s leading economy the current expectation is for unemployment to be released at 3.6% so anything different could see a lot of movement for global exchange rates as we end the week.
If you would like a free quote when buying or selling currency and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing from you.
Tom Holian [email protected]