The pound has slipped back a fraction from the heights it gained early yesterday but remains 9.5% stronger than last year against the US dollar and 4% up on the euro.
The governor of the Bank of England reiterated yesterday what everyone knew, which is that UK interest rates will almost certainly come down over the next year but won’t hit the lows of the financial crisis and Covid eras unless there is another upset of that magnitude.
Following the PMI data on Monday, which showed UK business leaders considerably more optimistic than those in the eurozone, Germany’s Ifo Business Climate indicator this month dropped to its lowest level since January, and close to its lowest since the pandemic. However, on the subject of economic confidence you can always seem to find another report that suggests the opposite, and in France consumer confidence was recorded yesterday at its highest since March 2022. It will be interesting to see if that translates into prices. We’ll hear French inflation on Friday, with a drop to just 1.6% expected.
For anyone moving to or buying in Spain, tomorrow we’ll hear data on Spain’s economy and inflation. Both appear to be heading in the right direction.
Over the next 48 hours there will be a chorus of central bankers speaking on interest rates, including Jerome Powell of the US Federal Reserve and Christine Lagarde of the European Central Bank.
These speeches certainly have the power to move exchange rates, so do consider fixing today’s near 2½ year high, with a call to your account manager on 020 7898 0541.
