The pound’s exchange rate took a significant hit this week after new data revealed both growing unemployment and a shrinking jobs market. Both effects of April’s new budget which increased the cost for businesses to employ staff.
Over a dramatic hour, the pound lost 0.6% against the dollar and 0.4% against the euro. Monday’s trading had looked like the first calm day in months, which shows just how quickly the markets can move.
To secure certainty for your budget, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
Today UK Chancellor Rachel Reeves is publishing her spending review, which includes a £39bn investment in new housing and billions more on national infrastructure projects. While these may lead to long-term growth, their impact won’t be shown in tomorrow’s GDP numbers which are forecast to fall.
Meanwhile, today sees new inflation figures published in the US. They are forecast to climb, driven by president Donald Trump’s tariff policy. With tariff pauses set to expire with countries around the world next month, the dollar may face a tumultuous time. And, when the dollar struggles, all other currencies feel the impact.
The euro has been this week’s winner, up on both the pound and the dollar. Though, unlike the US and UK, there haven’t been any major data releases in the eurozone to upset its current streak. Still, with last week’s interest rate cut and inflation falling below the 2% target, it makes Europe an increasingly attractive place to invest.
