What was meant to be a big week for the UK economy – with a new inflation data and a possible interest rate cut by the Bank of England – has been overshadowed by the growing conflict in the Middle East.
This morning the Office for National Statistics revealed that UK inflation fell to 3.4% in May. This was as predicted and could have put pressure on the Bank of England’s Monetary Policy Committee to cut interest rates from their current 4.25%.
However, with oil prices hitting a four-month high and the costs already being felt at the petrol pump, with prices climbing 0.2p and increases of as much as 5p to come, inflation may start climbing again.
In a year already filled with turmoil and shocks to the economy, the war between Iran and Israel threatens to make it even harder to predict what your money will buy you overseas.
To secure certainty for your budget, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
Later today, the US Federal Reserve Bank will reveal whether it is making an interest rate cut. It too is now predicted to hold the rates steady.
The last time the Fed’s chair Jerome Powell held the rates, US president Donald Trump threatened to fire him, and it sent the dollar tumbling. There’s no telling what Trump will say or do today and how the markets will react.
As has become the pattern in 2025, there is no certainty with what each week brings.
