The pound to euro rate has held remarkably steady in the past week and is now close to two cents stronger than the start of March. However, we shouldn’t get too far ahead of our ourselves – that’s more a reflection of uncertainty than any genuine progress. Things could change as soon as tomorrow lunchtime, when the Bank of England and the European Central Bank (ECB) announce their latest interest rate decisions.
If you missed out last week, the good news is you can lock in what is still a favourable rate today. To ensure that there are no nasty surprises when your next purchase reaches completion, call 020 8003 4915 and a member of our team will be able to help you.
While the pound might be doing well, the chancellor was not minded to sugarcoat the risks facing the British economy. These were ‘anxious times’ for the country, Rachel Reeves said, with households and businesses feeling the pinch from higher oil prices. Her wide-ranging remarks also touched on the economic impact of Brexit, the need to adopt AI at pace and plans to give local government new spending powers. Not bad for an hour-long speech.
European consumers might be having an even more anxious March than those in the UK. The German ZEW sentiment survey – an important measure of confidence – recorded its third largest fall on record from one month to the next. The only larger monthly declines came at the start of the covid-19 lockdown and during the outbreak of war in Ukraine.
In truth, the situation in the Middle East is at something of an impasse. President Trump’s efforts to convince US allies to commit warships to the shipping chokepoint in the strait of Hormuz ultimately failed, leading him to huffily claim he no longer wanted or needed Nato’s assistance. Oil prices are still at eye-watering levels and there doesn’t appear to be a resolution coming anytime soon.
Tomorrow’s interest rate decisions provide more risk at a time when buyers could really do without it. Both the Bank and the ECB are expected to keep rates unchanged, but the ECB in particular could be poised to spring a surprise. Sterling is likely to move sharply as traders analyse the impact of a radically different policy direction.
