The pound has started August 2022 at 3% above where it started July, 2% above where it started August last year, around 8% above 1st August 2020 and nearly 10% above 2019.
That last date was when GBP/EUR was on a slide after Boris Johnson became prime minister and it has been sharply on the rise again since he resigned as PM.
However, correlation is not necessarily causation.
There are more reasons for sterling’s sudden reversal against the euro and if you were looking for a political leader to blame it is probably President Putin’s actions in Ukraine that has caused the euro to sink, along with Europe’s hopes for a rapid economy recovery from the pandemic.
Sterling’s current success was predicted by virtually no-one. Check out our quarterly forecast to see which major banks got it most wrong. We shouldn’t judge them too harshly though, their predictions were for the end of August, and there is a lot that could go wrong before then. Maybe Barclays’ highly-paid analysts will be correct and GBP/EUR will be back to €1.15 by then, or JP Morgan’s, and the pound back at €1.14.
If you would see such a drop as a calamity, one that would damage your property-buying budget abroad, call your trader on 020 8108 5163 and lock in today’s rate, close to its strongest since April.
This week the Bank of England will be setting a new interest rate, so we can expect some movement around Thursday, if not before.
