Today Bank of England (BofE) Governor and his Monetary Police Committee (MPC) members decided to keep interest rates on hold at 0.5%.
As my colleague Alastair suggested in his post earlier this week sterling has fallen against all major currencies as the market is now suggesting me may not see an interest rate hike for the remainder of 2018.
Why has the pound fallen?
To many it is not a surprise the central bank has held rates and you can see a full run down of the meeting minutes here. Sterling reaction came following the negative outlook for growth figures, a follow on from poor GDP data seen in April. The BofE expects growth of 1.4% in 2018, down from its previous forecast of 1.8% made in February.
However, the Bank says that cut is almost entirely due to the disruption to the economy caused by the ‘beast from the east’ in March and it expects a rebound in the coming months. It noted that unemployment rates remain low but the overall tone of the report was ‘dovish’ with many analysts now not expecting a move from the central bank until 2019. A move that may not bode well if you need to buy Euros or Dollars with Sterling in the coming weeks and months.
Should you need to arrange an exchange in the short term today’s meeting has not done you any favours. We have now seen some sharp losses for the pound, having fallen two cents against the Euro this month and over eight cents or 6% against the US dollar in just over three weeks. To put that in monetary terms, a conversion of £200k to US dollars would have secured you over $17,000 more in mid April when compared to the current rates, just highlighting how important it is to keep fully up to date with market trends.
Our service is designed to keep clients up to date with key market events that can have a significant impact on the cost of your international money transfer. Here at currencyforecasts we can help you get he best exchange rates as we have access to commercial banking levels and multiple contract types to help safeguard your currency. For more information or to get a live quote please get in touch here.