Sterling starts the week with a spring in its step, strengthening by close to half a cent against the euro and a little more than that against the US dollar.
It should probably be seen more as a rebound after sterling lost strength just after the Bank of England’s interest rate decision on Thursday – which disappointed the currency markets – rather than a sign of fresh strength, as the pound is still a little below the €1.17 that was breached last week.
Many of our clients (as one of our account managers pointed out last week), are more interested in hearing about the pound weakening. Rather than moving abroad they are moving their assets back to the UK and sterling, perhaps taking advantage of the rise in overseas property prices, or have opted not to take out residency in the EU after all, even though they are entitled to.
What hope is there for them of a weaker sterling? It’s really very hard to say as we continue to wait and see which direction sterling will take after being on a plateau for well over a month now. It is still significantly stronger than this time last year but does very often weaken during the summer.
For those moving back to the UK, may I remind you of our excellent guide, Returning to the UK, packed with information on everything you need to reconnect to a life back in the UK, including housing, health services and tax.
You should also speak to your account manager on 020 8108 5163 and discuss the EUR/GBP rate you wish to be alerted to as sterling weakens, so you can lock it in for the year ahead and return your assets when you like, knowing the rate you will achieve.
Things to watch out for this week include: a speech from the Bank of England’s chief economist Andy Haldane at 13.00 today and another on Thursday from the governor Andrew Bailey, where they may give a clearer indication on the inflation vs interest rates argument.
Tomorrow morning there is house price data and GDP on Wednesday.
