This GBP update looks at the outcome of the Bank of England's Interest rate decision and discusses factors that could affect GBP exchange rates this week. The below table shows the market movements for a number of currency pairings in the last month:

Currency Pair% ChangeDifference on £200,000
GBP/EUR3.76%€8,806
GBP/USD3.05%$7,966
GBP/NZD7.53%$28,440

Closest vote by the MPC since 2007

The Pound strengthened yesterday morning in the lead up to and following from the Bank of England’s Interest rate decision. Although rates were kept on hold at the historic low of 0.25%, 3 of the 7 policymakers decided for a rate hike which was seen as positive for the UK and therefore Sterling.

The split between the Monetary Policy Committee’s members was the closest for a rate hike since 2007, due to inflation being close to a four year high at 2.9% and well above the Bank of England’s target rate of 2%.

Our well informed clients were able to take advantage of the almost 1 cent jump against the Euro and the Dollar, making a €200,000 and $200,000 purchase around £1,600 and £1,100 cheaper respectively in the space of just 20 minutes. This really highlights the importance of being in close contact with your Account Manager here ahead of any future currency requirement, so that they can help to take advantage of spikes as soon as they happen.

Mansion House Dinner postponed

Philip Hammond, Chancellor of the Exchequer, was due to speak for the first time yesterday evening at the annual Mansion House dinner, however the decision was taken to postpone this event following from the tragic fire which took place in the Grenfell Tower in London on Wednesday morning. Mr Hammond was expected to discuss the potential dangers of the UK opting for a Hard Brexit, and urging Theresa May to put the UK’s economy first in the official Brexit negotiations which begin on Monday.

Formal Brexit negotiations to begin on Monday

This morning at 11am, the Bank of England’s Quarterly Bulletin will be released and should provide an update on the current economic climate in the UK. There is little economic data released next week and so investor’s attention will be focussed on the formal Brexit negotiations starting from Monday. The UK’s Brexit Minister David Davis and the EU’s Chief Negotiator Michel Barnier will be meeting in Brussels, and I would expect increased volatility for all GBP currency pairings as information emerges from these discussions. If you have a currency transfer to make in the short to medium term future, I would strongly recommend being in contact with your Account Manager here who can help you to put a plan in place ahead of next week’s events.

For more information on how future data releases could affect your currency transfer call our trading floor on 01494 725 353.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.