Spending Review Due

Today all eyes will be on Chancellor George Osborne who is set to reveal £11.5bn in spending cuts for the financial year 2015-2016. While some departments have been told they will escape spending cuts other governmental departments and benefits will be under the microscope. This news may seem negative as it involves reducing spending, something that many believe needs to happen to help boost the UK economy, but it is agreed by the majority that the spending cuts are required to help bring the countries debts back under some sort of control, in fact Labour have confirmed that should they win the next election they would honour the spending cuts Osborne will announce today. So, with this in mind the cuts today, which are likely to be sweeping, could result in some Sterling weakness in the short term but could actually be beneficial for the Pound and the UK economy. So, if you have an imminent currency requirement then it would be worth speaking with one of our experienced currency brokers today who will be happy to discuss your requirements and how today’s announcement could impact your transfer.

Interest Rates To Remain Low

In Mervyn King’s last appearance in front of the Treasury Select Committee King stated that it would take a significant improvement in the UK economy before interest rates would rise or, importantly, Quantitative Easing (QE) would be reduced. We have recently heard from the States that they are to start tapering down their QE programme but it appears the UK is not in a strong enough position to follow suit. This to me highlights that we still have a long way to go before we will start to see any sustained strength for the Pound and so could mean we will remain range bound (trading close to these current levels) against some of the major currencies such as the Euro for some time to come. Next week will mark the end of King’s reign as Governor of the Bank of England and the introduction of Mark Carney who has previously been the head of the Bank of Canada. This transition is unlikely to cause major ripples in the currency exchange rates immediately but it will be Carney’s take on the UK economy, current interest rates and possibly most importantly in the short term QE, that will dictate Sterling’s medium term movement.

If you need to send money abroad and you are looking for great exchange rates make sure you speak with one of our dedicated currency brokers who will be happy to explain all the options open to you and keep you informed of all the latest currency news. You can call us on 0800 328 5884 or if calling from abroad 0044 1494 725353, alternatively you can email me on trh@currencies.co.uk