Sterling has leapt upwards this morning following the UK inflation announcement this morning.
Inflation rose by 10.1% in the year to March 2023, including 19.1% for food and non-alcoholic drink, which is an acceleration from last month. ‘Core inflation’, with food and energy taken out, may have been less than last month but was still far ahead of expectations.
No doubt the Bank of England’s panel of interest rate setters will be analysing the data, but the big picture is that a quarter of the way through the year the Bank of England is miles away from its target of halving inflation by year end. It is also twice as high as many other leading western nations including the USA (5%), Germany (7.4%), Spain (3.3%) and France (5.7%), which might make policymakers ask why.
If you find any of this confusing – and many economists and most politicians do, so don’t be embarrassed – our brand-new quarterly forecast was published yesterday and explains all, as well as giving the major bank’s predictions for exchange rates over the coming year. Download your free copy here.
What next for sterling? According to the aforementioned forecast it’s in for torrid rest of 2023.
To protect your budget for buying abroad or to lock in your regular payments with a forward contract, do call your trader on 020 7898 0541.
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