This morning the latest inflation hearings were supposed to give an insight to the Bank of England’s position in regards to future monetary policy however they were cancelled and pushed back to next Tuesday. This is the 2nd time the hearings have been pushed back a week.
However Ian McCafferty one of the members of the Monetary Policy Committee, speaking to the Daily post in North Wales exclaimed interest rates should be raised due to the rising inflation levels.
Interest rates were cut last summer after the UK public decided to vote out of the European Union. Mr McCafferty believes that the economy has not slowed as much as first predicted therefore rates should be increased to at least the levels we saw 12 months ago (0.5%).
For clients purchasing euros with the pound the hawkish comments from the Bank of England can explain why GBPEUR has increased from the mid 1.12s to the low 1.14s. Looking further ahead it will be interesting to see how Governor Mark Carney plans to tackle rising inflation as many of his colleagues believe an interest rate is inevitable, which would lead to sterling strength potentially towards the end of the year.
In the meantime GBPEUR exchange rates could fall to the lower teens if President of the European Central Bank Mario Draghi decides to taper the Quantitative easing program. The market reacted to his last press conference when he gave indication this could be the ECB’s next move, however he has since reported that the market perceived his comments in a way that wasn’t intended.
If you are buying or selling euros this week, month or year and I have not covered the currency pair you are trading, I would recommend emailing me with the currency pair (EURUSD, EURGBP, EURAUD) and the reason for the transfer (company goods, property purchase) and I will response with my forecast and the options available to you email@example.com. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.
** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **