Sterling bobbed gently up and down yesterday, ending the day around 0.5% up against both the euro and US dollar. It has since moved a little higher on news of a 0.2% rise in inflation in the year to August.
GBP is treading water while waiting for further clues on the Brexit talks. There were hints in the newspapers that Boris Johnson may be willing to compromise ahead of the Internal Markets Bill being brought back before parliament next week. We should learn more when he answers questions before the Commons Liaison Committee on EU negotiations and the economic response to the pandemic at 3.30pm.
The general theme at the moment seems to be waiting for answers, especially on how the UK will cope with a second Covid wave if the testing regime has fallen apart. Given that it was Battle of Britain Day yesterday on the 80th anniversary, the comparisons between getting things done with total efficiency against a ruthless foe then and now were not very inspiring!
Property buyers and would-be retirees abroad are also waiting for news. Such as on new residency rules, retirement visas, healthcare and pension arrangements and much more. We can probably assume there’ll be reasonable arrangements in the end, albeit with a bit of extra form filling. The evidence of the past few months is that when normal people start to solve problems, they get solved.
The other question is on the direction of sterling. We are already starting to gather our data for next month’s Quarterly Forecast. You can read last quarter’s forecasts here to see how the leading bank’s predictions stood up.
To secure today’s exchange rate ahead of a potentially difficult autumn, call your trader today on 020 8108 5337.
