GBP Exchange Rates Down

Mark Carney has delivered the latest Quarterly Inflation Report and in which he has stated that a Strong Pound is hampering UK exports and while the UK economy is still ni a fragile position it is becoming a concern. As soon as Mr Carney stated this Sterling plummeted almost falling back into the 1.24’s which is not good news for clients looking to buy Euros but for those considering repatriating Euros back to the UK. Mr Carney has also cut wage forecast by half stating that they now expect the average salary to rise by 1.25% this year, a worryingly low figure and follows figures announced earlier this morning that wages grew by the slowest pace since records began. However, on a more positive note the Bank of England did upgrade their growth forecast for the UK to 3.5% and also increased next years forecast stating that while the economy was finely balanced it was returning to a semblance of normality. In terms of interest rates Mr Carney was still fairly cautious but mentioned that they will rise over the coming years, currently analysts are split on when they think the Bank of England will hike interest rates with some predicting quarter 4 2014 and others quarter 1 2015. An interest rate hike is one of the biggest drivers for Sterling strength so should we see the central bank increase interest rates we may well see the Pound spike, but at the moment the recent spate of negative data and Mr Carney’s comments this morning have really hit the Pound hard as it now sits some 2 cents down from the high we saw last month.

This morning’s movements just go to show how unpredictable and volatile the currency markets can be and why it is so important to stay in close contact with one of our currency brokers here at Foreign Currency Direct plc so they can keep you informed of all the latest developments. To call straight through to our dealing floor call us on 0800 328 5884¬†or 0044 1494 725353 or you can email me directly on