Inflation Data Due – GBP Exchange Rates
Today at 9:30am we are due to hear the latest Consumer Price Index data which is one of the main measures of inflation. The Bank of England has an inflation target of 2% however recently the figures have been over that target and the expectation is for the figure to rise even higher, potentially close to 3%. Should inflation ever breach the 3% level (1% higher than target) the Governor of the Bank of England Mervyn King has to write an open letter to the Chancellor of the Exchequer explaining why inflation is so high and what the central bank plan to do about it. On top of the letter, high inflation could lead to calls from some analysts that interest rates should be hiked in order to keep inflation under control. A rise in interest rates can lead to Sterling strength however even just the talk of a rate hike can lead to Sterling strength. So, while high inflation may be damaging for the economy, especially an economy that is not growing it could be good news in the short term for Sterling exchange rates. This could mean that if you need to send money abroad today could present some good opportunities to buy foreign currency.
UK House Sales On The UP
Figures from the Royal Institute of Chartered Surveyors (RICS) has stated that UK house prices have continued to pick up with the number of sales up in January, the fourth consecutive month RICS have seen an increase in sales. As part of the announcement RICS also commented that the “very worst” the property market has suffered could be over. This is good news for the UK and as confidence apparently returns to the UK housing market it is possible we will see this filter through to the UK economy which in return could help GBP currency exchange rates.
More Job Losses In The UK
Barclays have announced that they will be making 3,700 job cuts as part of its target to reduce costs by nearly £2bn. Barclay’s profits have plummeted recently as they have had to set yet more money aside for compensating clients that have been miss-sold products such as PPI. Barclays has faced a lot of volatility in recent times with ex boss Bob Diamond coming under fire before resigning, huge bonuses being paid out and also being found to have miss-sold products to a lot of clients. As a result the bank are currently facing challenging times and the job cuts are a culmination of this.
At Foreign Currency Direct plc we constantly aim to help our clients beat the banks rates of exchange and save money on transfers, in fact this has seen us highlighted in the national press as the best exchange rate provider. If you would like to get a free quote for your currency requirements then do not hesitate to contact one of our experienced currency brokers who will be happy to discuss the options open to you. You can call straight through to our dealing team on 01494 849752 or you can email me directly on firstname.lastname@example.org.