Sterling failed to make much headway against the euro last week, a period dominated by more evidence of economic weakness and some home truths delivered by Chancellor Rachel Reeves.
The UK economy is suffering from several problems. Most importantly, it only grew by 0.1% in August, giving Reeves little choice but to look for more cash to serve as a buffer against any Black Swan events over the coming year. It is a delicate balance both politically and economically. Sterling and the Labour party’s near-term future could be decided by how well she pulls off planned tax rises and spending cuts.
The pound might rise or it might fall this week, but given it is downright impossible to predict with any certainty, you’d be brave to bet on it either way. That’s why we always advise you lock in today’s rate to protect your money. Call 020 8003 4915 today and our team will be glad to assist you.
Inflation is the name of the game this week. The economic boffins expect UK consumer price rises to come in at 4% in September. Should that happen, the Bank of England’s ability to cut interest rates looks very shaky as we head into the end of 2025.
Currency markets are still a little distracted by events over in the United States. Last week ended with some jitters around regional banks and the quality of their loans. Meanwhile, representatives from the United States and China will meet to hopefully put an end to another round in the trade war. All this as the government shutdown enters its fourth week.
And Turkish residents on the idyllic island of Cyprus handed the pro-European Union candidate a landslide win in the presidential elections. Tufan Erhürman campaigned on the promise to unify the island, leading to hopes that the decades-long partition would soon come to an end.
