This Sterling update discusses factors that are likely to affect GBP exchange rates. The table below shows the market movements for a number of currency pairings on Friday:
|Currency Pair||% Change||Difference on £200,000|
Following the Budget last week the UK growth forecast has been downgraded. The UK is now expected to be £42bn worse off in 2022 than previously expected. The UK’s leading financial think tank, the Institute of Fiscal Studies (IFS) has stated they expect there to be up to two decades of falls in earnings growth and subsequently a longer period of austerity. Forecasts for productivity, growth and earnings have been cut substantially.
The Treasury have announced that investment and reforms from Hammond are designed to build a country fit for the future. However, it all looks very bleak and does not bode well for the Pound.
The deadline to which a Brexit bill must be agreed is drawing closer. An agreement must be reached by 15th December. An offer of €20bn is currently on the table and that is expected to be increased to €38bn. If this does occur there is the potential for a small respite for the Pound. This will pave the way for trade negotiations to begin. Considering the current economic climate it may be wise to take advantage of current levels rather than the hope of gains from this event.
Tomorrow we have the results of UK bank stress tests if they are not keeping up with parameters set post financial crisis this does have the potential to weaken the Pound.
For more information on how future data releases could affect your currency exchange, call our trading floor on 01494 725 353 or email me directly at firstname.lastname@example.org.
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