The Pound gained vs the Euro during yesterday’s trading session following a surprise change in the voting pattern from the Monetary Policy Committee which confirmed a vote of 5-3 in favour of keeping interest rates on hold.
For many months there has only been one vote in favour of an interest rate hike and as inflation has been spiraling in an upwards direction this has led to the change in the votes.
The recent expectation is that interest rates will be kept on hold for the foreseeable future but with inflation hitting its highest level in almost 4 years this is becoming a real concern for the British economy.
The current target for UK inflation as set by the Bank of England is for 2% but the figure came out at 2.9% which is way above the target.
We are currently in a hung parliament and when this happened previously it took 20 days for the Lib Dems and the Tories to form a coalition and at the moment the talks between the Tories and the DUP are dragging on.
The next stumbling block for the Pound will come soon as the UK is due to begin Brexit negotiations next week.
Brexit Minister David Davis and the EU’s Chief Negotiator Michel Barnier will be meeting in Belgium and I think this will cause problems for the Pound vs all major currencies including the Euro as we go into next week.
If you need to buy or sell Euros in the near future in order to avoid the uncertainty it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.
To find out more information or a free quote I have been working for one of the UK’s leading currency brokers since 2003 and am confident of being able to offer you bank beating exchange rates so feel free to email me directly.
Tom Holian firstname.lastname@example.org