The pound fell, fell again and then fell some more yesterday against the euro. The immediate reason was the finding from the Office for Budget Responsibility (OBS) that the Chancellor will need to find another £20bn to make up for falling UK productivity and stay within fiscal rules in the Budget, now four weeks away today. That looks like meaning rising taxes for some and falling public spending elsewhere – neither of which the currency markets are big fans.
Sterling hit its lowest against the euro since April 2023 and against the US dollar since August. Against the Canadian dollar sterling lost 1.4%, but the bigger story elsewhere will be some vital interest rate decisions in the USA and Canada today, Japan and Europe tomorrow.
In Germany a key consumer confidence index hit its lowest reading since April, but just a day after two business surveys there showed German businesspeople in a confident mood. New cars were certainly selling well in Europe, a 10% year-on-year increase throughout the bloc but driven by Europe’s current star economy, Spain. We’ll hear shortly if Spain’s economic heroics continue with Gross Domestic Product (GDP) for the third quarter of the year.
The world’s central bankers have a busy few days ahead of them as they analyse the economic data and make those interest rate decisions, in turn influencing exchange rates. Why let their decisions affect your own costs? You can be proactive and talk to your account manager on 020 8003 4915 about fixing your rate today.
Also in transport news, Wizz Air is to begin trialling business class-style tickets, by letting passengers book an empty seat next to them. The company, which currently ranks lowest among UK operators for customer service according to Which?, also mentioned that it was using AI to calculate fuel consumption better, which isn’t worrying at all.
In business news, The FTSE 100 hit a new high for the fourth day in a row, while Microsoft and Apple joined Nvidia in seeing their value hit $4trn.
