The pound fell against the euro for the second consecutive week last time out. June has proved a serious challenge for sterling. Since the beginning of the month, GBP/EUR has weakened steadily by close to 3 cents, a fall that means your buying power has shrunk by around 2% in that time.
As a reader of our regular emails, you’ll know we spend a fair amount of our time warning against “Black Swan” events. The conflict between Iran and Israel (and now the United States) is shaping up to be the latest in a long line of these unforeseen disruptors.
Flights to the Middle East have been diverted or cancelled after the US unleashed “bunker busters” on Iran’s alleged nuclear sites over the weekend. The price of oil hit a five-month high this morning and a cloud of anxiety is crouched above proceedings. The risk to your budget is that these events spiral out of control and send sterling lower still as markets seek out safety.
In this immensely unpredictable time, we would highly recommend protecting your money by locking in today’s rate. Call your account manager on 020 8003 4915 today to remove the risk from your next transfer. Not only will this provide peace of mind, it also means you won’t be affected should things take a turn for the worse.
Poor retail figures certainly didn’t help the pound. In May’s data, UK retail sales fell by 2.7% month-on-month – the steepest monthly drop since December 2023. That news came hot on the heels of Thursday’s interest rate decision from the Bank of England, when governor Andrew Bailey issued a stark warning on the state of the job market.
We’re heading into a quieter period in the economic schedule, but all eyes will be on Iran and the wider question of diplomacy versus conflict. On that note, keep an eye out for this week’s NATO summit in The Hague, where delegates will certainly have plenty to discuss.
This morning, we’ll get some information on UK economic output, before German inflation data arrives later in the afternoon.
