Pound vs Euro remains strong this week
The Pound Euro is close to its best rate to buy Euros in a few weeks after a solid start to the week.
The Purchasing Manager’s Index helped to demonstrate that the UK economy is faring a little than many may have expected including myself.
After having recently avoided a recession in the UK there are a few bright shoots appearing at the moment.
However, with inflation still causing a huge problem for consumers at the moment there are still a number of big hurdles ahead for Sterling exchange rates.
Food inflation is above 20% and fuel at the petrol pumps still remains relatively high.
When I walk downstairs to glimpse at the smart meter I close my eyes and then turn it round to face the wall as I consider ways to reduce my energy bills.
Energy prices still remain high and until we really start to see wholesale prices fall this will continue to impact upon inflation.
The Bank of England are clearly committed to keeping inflation under control by increasing interest rates.
We have seen 10 consecutive interest rate hikes by the central bank since December 2021 and although expectations are for them to slow down we could see another few more coming in the near future.
Over history when a bank raises interest rates then this would often cause that particular currency to strengthen.
However, we have also seen the European Central Bank come to the table with their own recent change in policy to begin their own rate hiking cycle.
Therefore, any gains that we may have seen by the Pound has been eroded by the strength gained by the Euro following the rate hikes.
If you would like a free quote when buying or selling currency then contact me directly.
I have worked for one of the UK’s longest established brokers for 20 years so please contact me and I look forward to hearing from you.
Tom Holian [email protected]
