In a busy week for high level data for the UK the first out of the traps was inflation this morning. The fall to 3.6% was widely expected and means that while we are still on course for an interest rate cut in December it is by no means done and dusted. We should get a clearer picture by the end of the week.
Later today we will get official house price data from the UK and on Friday it will be Retail Sales and the survey of business leaders known as the Purchasing Managers Index (PMI). There will also be a close eye on stock markets as the froth comes off recent gains. The FTSE lost around 3.5% this week, and while it only takes it back to where it was in late October, there are worries that it could be the start of the long-threatened market rout – and the pound does tend to follow stock markets.
It’s now only a week until the Budget and the risks are ramping up for sterling. There will be both immediate risks on the day and also over the following months, as the impact of its measures are felt both on the economy and the political situation. Please join us for a webinar the day after, where Smart Currency’s Managing Director will be discussing both the currency implications and the wider impacts on those buying property or moving money overseas. Register here.
For today, however, having shrugged off the inflation numbers this morning sterling has managed to avoid slipping any further against the euro and is a good half cent up on its low on Friday. It’s also worth mentioning that despite the many negative comments about the UK economy right now, we are far from the kinds of lows we saw in the immediate post-Brexit and financial crash worlds.
To talk through your options, please call your account manager on 020 8003 4915. You may well feel it’s worth locking in your rate ahead of the Budget and other potential ‘black swans’ downstream.
