The pound strengthened by over a cent against the euro after last week’s interest rate cut from the Bank of England. The Bank decided on a 0.25% cut (taking the headline figure from 4.25% to 4%), although this was only after an unprecedented second vote once the first had failed to yield a majority decision.
Despite the drama, Thursday’s vote meant homeowners could walk with a spring in their step and a little more cash in their pocket, too. But don’t bet on the cuts continuing; Governor Andrew Bailey noted in his press conference there was still “genuine uncertainty” around future cuts with inflation holding stubbornly high.
If anything, last week actually made it harder to predict what comes next. With some important economic data to come, we recommend you lock in today’s rate to keep your money safe should exchange rates swing this way and that. Call your account manager today on 020 8003 4915 to discuss your requirements.
It was the Bank’s turn in the spotlight last time out, but this week it’s all about the data. The UK will report economic growth figures for the three months to June on Thursday. Chancellor Rachel Reeves will no doubt be crossing all of her digits for a larger increase, but it would take something spectacular to quiet talk of tax increases in the autumn.
On the other side of the equation, another punishing wave of inflation seems to be taking hold. With everything from food to services becoming more expensive, Tuesday’s average earnings report should show us if wages are keeping up with those increases.
Beyond the United Kingdom, this week’s key event could well be a planned meeting between US President Donald Trump and Vladimir Putin. Will these negotiations end the war or mark a pause? It’s hard to say, particularly with Ukraine’s Volodymyr Zelenskyy conspicuously absent from the talks.
