It has been confirmed this morning that UK Consumer Price Index (CPI) has fallen from 2.8% in July to 2.7% in August. CPI is the main measure of inflation as it tracks the chang in prices for a basket of goods and so the 2.7% figure effectively states that this basket of goods is 2.7% more expensive than this time last year. A healthy economy would like to see inflation running at a steady level and in fact the Bank of England have a target for inflation which is set at 2%. The Bank often uses interest rates to help control inflation but with the addition of Quantitative Easing and the pressures of a struggling housing market it has been a lot more difficult for the Bank of England to keep inflation in check through these methods. As a result the fact that inflation has made a move, albeit small, back towards the target level is likely to be seen as a positive for Sterling and could help continue to push Sterling exchange rates up. Currently we are witnessing some of the best exchange rates for Sterling Euros and also very strong levels to buy US Dollars following what has been a fairly consistent run of positive economic data. As we have so often seen in the past these spikes in the market do not often last for long and so if you need to transfer money abroad make sure you speak with one of our experienced currency brokers who will be able to keep you informed of all the latest currency market developments and the different options available to you so that you can make an informed decision as to when to transfer your funds internationally.
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