The pound has shot up this morning, reaching at least 1% higher than this time yesterday against the euro.
So it might well be worth your while calling your trader on 020 8003 4915 to discuss locking it in a with a forward contract. As I’ll highlight below, there are increased risks of currency volatility looming.
This morning’s leap follows inflation data just released which shows prices rising by 5.1% in the year to November. That’s two and a half times faster than the government has instructed the Bank of England to maintain it.
This strengthens the case for an interest rate rise tomorrow, although the Bank of England looks more likely to see if the dire warnings on the Omicron variant play out before trying to restrict people’s spending.
There were no great surprises with unemployment yesterday, remaining on 4.2%, although the number of new claimants was lower than expected post-furlough scheme and earnings were up higher than expected.
However, as well as health and economics, following the rebellion by 99 Tory MPs yesterday and the general anti-Boris Johnson mood that seems to have gripped parts of the media, we may have to start considering political instability among the causes of currency instability.
A change of PM within a party is rarely as disrupting as a General Election, but it’s nevertheless something else to consider for 2022.
In the meantime, prices rising at 50 times the interest rate is hardly a great prospect for savers, so if you’re looking to put some money into property overseas, do call your trader on 020 8003 4915 and lock in today’s much elevated rate.
