Sterling has now been hovering around the same level against the euro for four weeks, showing no signs of breaking through the current resistance level. This is despite an interest rate rise to 0.5% apparently guaranteed tomorrow, and with recent economic data showing prices rising fast.
Shop prices are now shooting up at twice the level of the previous month, according to the British Retail Consortium, and house prices by 11.2% according to the Nationwide yesterday.
For savers, rising interest rates will be a welcome relief after a decade of minimal returns for all the careful management of their money. But inflation is chipping away at those savings at a much faster clip, currently at its worst since 1992, when Britain was still in the Exchange Rate Mechanism, if you can remember that far back.
So tomorrow the Bank of England will start to put that all right again. We have been here before, mind you, with promises of an interest rate rise that was priced in and then failed to happen, sending sterling shooting down. You can read more about the central banks’ decision-making processes in our new Quarterly Forecast.
With so much uncertainty in politics and economics, anyone wishing to put their savings into bricks and mortar abroad this year should call their trader today on 020 8003 4915 and lock in their rate.
We are thrilled to be sponsoring the new Your Overseas Home virtual property and buying exhibition on 26th March, so why not book your free pass to Your Overseas Home now?
