Sterling rates rebound but for how long?

Figures on the economy lately have suggested the impact of Brexit is nowhere near as bad as it could be leading to the rise in the value of sterling as investors rebuy the pound to take stock of the improved expectations on the markets. The thing is all the new is basically old news, we know that the UK economy wasn’t in too bad a shape as we lead up to the vote which means that the early period following the vote has seen some robust data on some fronts. Let us look at what has helped the pound and decide whether or not this is likely to help the pound in the future?

If the markets are focused on the good news now they might fail to see the problems which could see the pound fall in the future. Quite simply if the UK businesses which are reporting big declines in orders and demand are correct then the coming months should see declines in the all important GDP data. What might help the GDP figures for the this quarter would be Retail activity which I feel due to the improvements in the weather and UK sporting prowess owing to the Olympics will be strong. This will in my opinion not outweigh the overall negative impact from a slowdown in business and GDP growth for the UK will come in lower which will see some job losses and a rise in Unemployment.

What will keep sterling on the back foot will be the uncertainty around any political developments with the Brexit, this could take well into 2017 to arrange. If you have any transfers involving sterling why delay making plans? For more information on the markets or our services please fill in the form or email me Jonathan personally on [email protected]

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