Sterling begins the week at its lowest level against the euro since November 2023, following some rather significant news from Donald Trump’s Scottish golf resort. On Sunday, European negotiators were able to strike an eleventh-hour trade deal with the United States that should take some pressure off businesses and boost the eurozone economy.
Meanwhile, sterling slipped by half a cent across Thursday and Friday as the clouds darkened for Chancellor Rachel Reeves. In a stark contrast to the Lioness’s glory in Switzerland last night, the pound is struggling to repel relentless attacks and offer signs of a way forward amid weak growth.
Will the pound weaken again this week? Perhaps, but the problem is it’s nigh on impossible to say for sure. That’s why we always say you should lock in today’s rate to keep your money safe. Call your account manager today on 020 8003 4915 and we’ll be happy to help.
The International Monetary Fund (IMF) led the doom chorus in its yearly review of the British economy. The IMF said the government would need to make “tough choices” come autumn, and the report even suggested radical measures like scrapping the triple lock on pensions and making some people pay for the NHS might be necessary.
This couldn’t have come at a worse time for sterling. After seeing consumer confidence fall, June’s glorious spell of sunshine failed to boost sales in retail establishments as much as had been expected.
On the other side of the equation, the euro remains largely unaffected by the massive interest rate gap between the European Central Bank (2%) and the Bank of England (4.25%). In fact, it actually benefitted from the suggestion that an increase to rates could even be on the cards later this year, as well as news of the trade deal.
And for any readers making home renovations, be grateful that at least you don’t have the President of the United States breathing down your neck. That was the bizarre situation Federal Reserve chair Jerome Powell found himself in last week, with Trump touring the Fed’s new digs and finding time to publicly probe the cost of the project ahead of this week’s interest rate decision.
