The pound weakened by over a cent against the euro over the course of last week, with events coming to a head on a remarkable Wednesday.
In a nutshell, sterling’s troubles worsened after the prime minister was forced to give in to his own MPs, who demanded planned cuts to welfare spending be cancelled. But that decision meant the government’s tight budget would be put under further strain. Fears then spread that Labour would have no choice but to raise taxes at the Autumn statement – something they had promised not to do, you may recall.
Last week is a perfect example of why your money is at risk, even at times of apparent calm. Often, one problem can beget another, then another, until a currency is faced with unstoppable pressure.
We may sound like broken records banging on about this risk, but it’s so dangerous because it can’t be accurately predicted. Locking in today’s rate is always the best course of action because it keeps your money safe in times of stress. Call your account manager today on 020 8003 4915 to get started.
After last week’s chaos, any sort of calm would be welcome for the pound. This week is light on data, with the notable exception of May’s GDP report. After a dismal performance last month, sterling is in urgent need of a pick-me-up.
And as if there wasn’t enough tension to go around, Wednesday (9 July) marks the end of Donald Trump’s extended tariff negotiation deadline. The eurozone is scrambling to reach a deal before then, something they must do with the added pressure of a potential levy on agricultural produce. Nobody on the trade team is taking their summer holiday just yet, it’s safe to say.
