After a week of highs and lows, sterling starts the week stronger than it did against both the dollar and euro, compared to this time last Monday. These fresh gains follow last Friday’s news of Britain’s Chancellor, Kwasi Kwarteng being officially dismissed after the recent market turmoil his ill-received mini-budget triggered.
Prime Minister Liz Truss held a brief press conference on Friday afternoon, naming Jeremy Hunt the UK’s new Chancellor, in addition to U-turning on plans to cancel the rise in corporation tax. Truss confirmed the rise would go ahead, and that it will raise £18bn in taxes for the UK. Britain’s new Chancellor is to make an announcement today.
Meanwhile, markets worry that Truss’s dismissal of Kwasi Kwarteng, in addition to revoking the mini-budget may not be enough, as fears that the pound could hit parity with the dollar continue to rise.
Truss faces further criticism with questions now circulating about whether her days as prime minister are numbered. Tory MP Crispin Blunt said thinks “the game is up” and now it is a question of “how the succession is managed”. Likewise, Labour party leader Keir Starmer said, “the prime minister says she is in charge but the evidence this weekend suggests she is in office but not in power”.
In this unpredictable political and economic climate, it is impossible to predict what may happen next with the pound, however you can find out what major banks are predicting for the next quarter and beyond in our latest Quarterly forecast.
In the eurozone, Italy’s annual inflation rate will be released at 9am, and Germany will be expecting its economic sentiment index tomorrow.
Likewise, Canada’s annual inflation rate will be announced on Wednesday, at the same time as US housing starts and building permits (1:30pm UK time).
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.
