After gaining almost 1% against the euro and 2% against the dollar in a single day yesterday, sterling has been knocked by this morning’s inflation figures.
UK inflation hit a 40-year high of 9%, just below what markets predicted, driven mainly by soaring energy prices and higher fuel and food prices.
While the data caused a knee-jerk reaction for sterling, the figure was no real surprise and will likely not impact the Bank of England’s next interest rate decision or have any major impact on the pound, which remains around 1.5% higher against the euro than this time last week.
Nevertheless, the volatile nature of the currency markets is as evident as ever, and with Brexit once again in the headlines due to “the grave situation in Northern Ireland”, to quote Liz Truss, tensions remain high between the UK and the EU. Further developments with the Northern Ireland trade deal could mean sterling’s current strength is short-lived, so it may make sense to lock in today’s rate while it’s up.
To put these fluctuations in context, particularly for those hoping to purchase a property abroad, a €200,000 property has varied in price by over £3,000 and a $200,000 property by almost £7,000 in the last month alone – a tidy sum to spend on moving costs or furnishing your new overseas home that can easily be protected with a forward contract.
Before I go, I did just want to ask if you know of anyone who could benefit from our services? It could be a friend, family member or colleague. Whether they are looking to buy a property overseas, receive a foreign pension or send money to a family member abroad, we’d love to help them with their currency transfers. Simply refer them here and we’ll be in touch.
