Inflation is once again in the spotlight after UK consumer prices hit a 30-year high this morning, causing the pound to regain some of its lost strength against the dollar.
Annual inflation in January rose by 5.5%, the highest since early 1992 and far above the Bank of England’s target of 2%, posing the question of whether the Bank should be doing more to tackle this rise.
But the real driver of currency movements at the moment continues to be the uncertainty around Russia and Ukraine.
UK Prime Minister Boris Johnson has warned of “mixed signals” from Russia after it claimed it was pulling back some of its troops from the border, yet there seems to be no real sign of de-escalation. Safe-haven currencies, such as the dollar, therefore, remain favourable by markets, putting pressure on sterling.
Any further developments in Eastern Europe could spell volatility for the pound. So, if you’re hoping to buy abroad this year, don’t risk losing out on your dream overseas home to currency fluctuations.
You can control this risk by locking in today’s rate, which is currently around 0.7% higher against the euro than this time last week and far above what it was this time last year, with a forward contract. Just give your trader a call on 020 8003 4915.
There’s also still time to get your free e-pass to tomorrow’s webinars about living in Spain and France post-Brexit. Clear up any confusion on the ’90-day rule’, visas and residency. Register here.
