UK prices have confounded the forecasters (just for a change), rising by 4% in the year to the end of December, when 3.8% had been expected.
Not much of a difference maybe, but the change in direction (the previous month inflation fell sharply) will be causing consternation from Threadneedle Street all the way to Downing Street, as well as in households throughout the country.
Good news, however, for those buying euros or dollars. GBP/EUR strengthened sharply on the news and if you were buying a €250,000 house in Europe at one point in the 90 minutes after 7am it cost you £830 less.
If you have a transaction coming up, why not fix today’s elevated rate with a call to your account manager on 020 7898 0541.
However, rising inflation again has more important ramifications all round. For example in borrowing costs, as lenders eye what the Bank of England might do in response to the apparent failure of their efforts to contain inflation, and in the effect on the overall housing market that that might have.
Which highlights the risk of holding off on a major transaction in the hope of making small gains.
What of the larger trends for the upcoming year? You can read all about these, their potential impact on exchange rates and the predictions from major banks in our brand new Quarterly Forecast, hot off the press.
My own view is that while the analysis is fascinating, the predictions are not worth the pdf they’re written on. But I still enjoy reading them, and hope you will too. Download your forecast here.
