Looming over this week is the shadow of the Bank of England’s big decision: will it cut interest rates?
The Monetary Policy Committee announces on Thursday whether it will cut interest rates from 4.25% to stimulate growth. Analysts are widely predicting a cut. However, unemployment and inflation are both up and US President Donald Trump’s on-again, off-again tariffs have injected uncertainty into the markets throughout 2025.
Over the in the US, the equivalent committee at the Federal Reserve have held interest rates steady all year. They’re waiting to see what all the changes to trade will do to the cost of goods.
To secure certainty for your budget, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
It’s easy to see why the Fed is uncertain how to proceed.
At the end of last week, Trump announced a new wave of tariffs – including a 35% levy on Canada, one of its nearest and largest trading partners. The impact on the US could be huge and any great shakes in the States will be felt around the world.
Friday also saw the Bureau of Labor Statistics reveal a massive slowdown in the US employment numbers. Not only that, it revised down two previous figures, revealing the slowdown had been going on for months. Trump promptly fired the department’s chief, saying she’d rigged the numbers.
With one statistician fired for reporting numbers Trump doesn’t like, it will be hard to trust any future positive numbers.
Yesterday brought further confusion, when two competing survey companies reporting on the US services industry found opposing results, one saying the industry and grown, the other that it had contracted.
Uncertainty when it comes to numbers means we can see major swings in the currency without warning. As numbers are revised and updated, traders will rush to correct their investments and a currency can sharply rise or drop as a result. It’s one reason you may want to secure your money against shifts in the market.
