Will the Pound drop now that the UK is in recession?
Much of the talk regarding the Pound’s value and the performance of the UK economy this month had been geared towards last week’s GDP release for Q4 of 2023.
It’s now official that the UK is a shallow recession, and there was a drop in the Pound’s value when the official figures were released as the drop in economic output in Q4 was higher than expected.
The markets had expected to see a -0.1% drop quarter-on-quarter,...
UK Inflation remains sticky at 4% – will this help the pound?
UK inflation is holding steady at 4% according to data released by the Office for National Statistics. Last months inflation data also posted at 4% which shows inflation is remaining sticky in the UK. Markets were expecting a slight uptick again so a flatline is better than expectations for UK mortgage holders.
Sterling exchange rates have largely remained buoyant following the release as the prospect of interest rate cuts this quarter has decreased. GBPEUR remains within reach of the...
Could the Pound be influenced by this week’s busy economic calendar?
After a fairly muted start to 2024 for GBP exchange rates, the outlook what which factors could influence the currency moving forward have become clear.
The Bank of England, European Central Bank and the Federal Reserve Bank in the US are all expected to begin cutting interest rates later this year. But the BoE differs in that the cuts are expected to begin later this year, and the number of cuts is expected to be slightly less.
GBP exchange rates remain strong as interest rates remain at 15-year high
Last week the Bank of England voted to keep interest rates on hold for the 4th consecutive time. Whilst this was expected in the lead up to the decision, we have seen a change in the voting patterns of the 9-voting members.
The rate will remain at 5.25% and the vote was a 6-3 split. Interestingly one member of the BoE’s Monetary Policy Committee voted for a cut so could this be the start of a change of approach...
Could this week’s economic updates push the Pound higher?
Looking over a 1-month chart for the Pound to Euro exchange rate, the Pound has gradually climbed in a consistent trend against the Euro.
There has been little volatility, but the GBP/EUR pair have climbed from 1.1500 up to 1.1725 in the space of 1-month, which is an almost 2% increase.
At last week’s European Central Bank (ECB) interest rate decision and statement afterwards ECB President Christine Lagarde opted not to push back against expectations of...
Sterling hits September high vs the Euro
GBP
Last week, we witnessed the release of numerous readings of economic data across the UK, having significant impact on the strength of the British pound. On Tuesday, we experienced data release of the average earnings. A slow rise in the average earnings was recorded, but regarded promising for the strength of the pound as it takes pressure off the Bank of England- the central bank- by easing inflationary pressure. In theory, this should slow down inflation which may...
When will the Bank of England begin cutting interest rates, and how could this...
The Pound traded within a very tight range last week, as currency markets have begun the year in quite a muted fashion.
There was a range of just 115 pips for the GBP to EUR exchange rate, and the EUR to USD exchange rate traded within a range of just 80 pips. The EUR to USD exchange rate is the world’s most traded currency pair so this demonstrates how quiet markets were last week.
Throughout much...
Could the Pound fall in value if the UK officially slips into recession?
Despite being a quiet week for economic data releases, on Friday there is arguably one of the most important data releases for the UK economy so far in 2024 as GDP figures for November will be released.
In the third quarter of 2023 the UK officially contracted after revised figures showed a slight drop in economic output of -0.1% across the 3-month period of July, August and September.
For the UK to into an official recession...
Could a UK recession apply further downward pressure on the Pound?
Last week the Bank of England voted to keep interest rates on hold at 5.25% as expected by the markets.
Financial analysts now believe that the Bank of England has completed its current cycle of interest rate hikes with the attention now turning to how long the BoE will keep interest rates at the current elevated levels.
The Pound remained quite flat against the Euro as a result of the decision, but due to some US Dollar weakness the Pound to US Dollar rate actually climbed...
Will comments from the Bank of England this week help support the Pound?
Another week without many economic updates out of the UK is on the cards this week, with the main focus being the Bank of England’s interest rate decision on Thursday.
The Pound suffered last week, losing value against both the Euro and the US Dollar as the lack of data released from the UK left the Pound vulnerable. Aside from the USD and Euro strengthening against the Pound, the Pound is also vulnerable at the moment due to global risk sentiment declining due to the...