The pound has responded to today’s inflation figures by dropping close to 0.5% against the euro and US dollar. The year-on-year rise to 9.1% wasn’t as high as some had predicted, which is perhaps why sterling has weakened, but is nevertheless a 40-year high.
Although on 22 June it’s a bit early to say that winter is coming, the year has now turned and the days started growing that tiny bit shorter. For those planning their move abroad, with the typical transaction taking two to three months, now is the time for serious planning if you want to enjoy the sunshine all year.
But where will sterling be in three months’ time? We’re starting work on our next quarterly forecast this week, but if you care to look back at the one you may have downloaded a couple of months ago, you’ll see that not a single major bank predicted that GBP/USD would be this low. You can still download it here. At least our analyst’s report was accurate, if not the supposed experts in the big financial institutions.
There is every chance that sterling could continue to fall as higher interest rates lead to recession and the horror of stagflation. The UK is particularly at risk, given the looming trade war with the EU over Northern Ireland and the fact that some other currencies are seen as safe haven assets, good to buy in a recession, while others such as sterling are not!
Therefore, to lock in your rate for that purchase later in the year, do call your trader today on 020 8003 4915.
