With most people looking ahead to the Bank of England’s (BoE) interest rate decision tomorrow lunchtime, the sterling to euro rate has very quietly advanced to its strongest level so far this year. That may not last for long, so if you’d like to take advantage of these favourable conditions, you can lock in today’s rate by calling your account manager on 020 8003 4915.
In just two weeks, the pound has strengthened by a cent and a half and is this morning flirting with highs not seen since August 2025. The slightly more positive economic outlook here in the UK has been a tailwind for the pound, as has the suspicion that Andrew Bailey and his colleagues at the Bank will leave interest rates unchanged at 3.75% tomorrow. That scenario would cause more pain for homeowners and many businesses, but it would support savers and (in theory, at least) the pound.
Of course, the euro has its own interest rate decision to contend with. Some crucial inflation data arrives today and that should help guide the European Central Bank. If those numbers are anything like those that came out of France yesterday, where headline inflation fell to its lowest since 2020, it seems unlikely that interest rates will be changed.
The United States government has resolved a partial shutdown with a $1.2 trillion funding deal. There’s still the looming issue of funding for the under-fire Department of Homeland Security to resolve, a sticking point that could cause more shenanigans in the next couple of weeks.
Gold and silver – two ‘precious metals’ prized for their stability through economic hardship – reversed some of their stunning losses yesterday. After a massive rally took each to record highs, the bottom fell out rather quickly either side of last weekend. Tuesday’s recovery was almost as dramatic and shows just how unpredictable even nominally stable investments can be.
House prices ticked up last month in Nationwide’s British property survey. However, it’s worth bearing in mind the 1% pace of annual growth is still notably below the recent average.
Perhaps that explains why Santander is launching 98% mortgages in an effort to capture the first-time buyer market. “My First Mortgage” offers a five-year loan at a fixed rate of 5.19%, the caveat being the offer only applies to buyers looking to purchase a house and excludes customers in Northern Ireland.
