Sterling gained around 0.3% against the euro yesterday, regaining its position safely above €1.17 after dropping below earlier in the week. It’s up on the dollar too, just about.
All that may change in about 27 hours with the Bank of England’s interest rate decision, which this month coincides with a quarterly Monetary Policy Report. (If you haven’t downloaded our own quarterly forecast yet, you can do so here. It’s packed with readable analysis as well as the all-important guesswork-sorry-I-mean-predictions from the big banks on where exchange rates are heading this quarter and year).
The essential issue facing central banks is whether to risk inflation getting out of control while boosting the economy post-pandemic, or to raise interest rates and stop printing money in an effort to prevent rising prices. We will know much more about their thinking and the direction of travel by tomorrow afternoon.
However, if you have money to pay overseas in the next year I would really take the safest course and lock in today’s rate as the pound could go anywhere tomorrow. Just call your trader on 020 8003 4915 to do that.
The issue facing many of our clients is whether to continue accepting the loss in their own savings as rising prices outstrip their returns.
For those debating whether to buy abroad, the hoped for post-lockdown bargains in our favourite overseas property areas simply aren’t materialising. So there seems little point in waiting, especially with planes and ferries heading to the Continent half empty!
Happy property hunting if you decide to go for it.
