Sterling climbed sharply against the euro yesterday, while oscillating between fairly tight margins against the US dollar.
It was a quiet start of the week for data in the UK, but a report from PwC found that the mood about finances has turned sharply negative among consumers in recent days as they “look to tighten their belts as they face up to cost-of-living pressures”, according to a PwC spokesperson. Their consumer sentiment index stood at -20, a fall from +8 this time last year.
Nevertheless, the pound gained around 0.75% on the euro over the course of the day.
Indeed, the euro fell across the board as apparent atrocities by retreating Russian troops in Ukraine shocked the world, decreasing any chance of peace in the near future and raising the possibility of further sanctions and an oil and gas embargo.
Although the pound’s gain was largely a function of the euro’s across-the-board loss, there were interesting comments from Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, the only member of the Monetary Policy Committee to vote against higher interest rates last month. He said that worries over 1970s-style inflation were overblown and that the Ukraine war might lead eventually to a lowering of inflation to below the 2% target.
In business news, the City minister John Glen said that the UK was going to become a global hub for crypto currency, saying: “the UK is open for business and open for crypto businesses”. However, Bank of England (BoE) governor Andrew Bailey was a little more circumspect, warning that the technology was “an opportunity for the downright criminal.”
British Airways joined easyJet in cancelling large numbers of flights on the first day of the school holidays amid a wave of staff illness and the hiring crisis, warning that disruption could continue through the spring and summer.
As we reach the end of the financial year, there is little high-level data this week, but make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Personal Trader on 020 7898 0541 to get started.
