So far this week, the pound continues to recover to levels seen prior to the Chancellor’s mini-budget announcement on 23rd September. Today, sterling is still gaining fresh strength against the dollar after falling to a 51-year low 9 days ago. However in the grand scheme, is still weaker than the dollar overall. It is a similar story against the euro, with sterling making fresh gains but still weaker overall.
UK Mortgage brokers say that lenders may have to offer cheaper fixed rate mortgages following the recent turmoil in government bond prices. Rates for fixed rate mortgages continue to rise this week, with the average for two-year fixed rate mortgages increasing on Monday to 5.97% (from 5.75%)
Meanwhile, Liz Truss confirmed yesterday that the UK government is in the process of seeking long-term energy contracts with suppliers from various countries, such as Qatar and Norway, due to the shortages faced following Russia’s obstruction to eurozone gas supplies.
The Treasury fears that this could mean the UK is locked into expensive long-term deals, but Truss emphasized that finding alternative gas supplies is imperative as “we never want to be in a position again where we’re dependent on authoritarian regimes for our energy”.
Eurozone balance of trade data shocked markets today with Germany’s results coming in much lower than expected. The trade surplus plummeted to €0.6Bn , disappointing markets who were anticipating €7.3Bn.
America’s Balance of trade will be released at 1:30pm UK time.
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