Mark Carney the Bank of England governor spoke out yesterday that UK inflation is due to rise owing to the falling value of Sterling. As the UK imports such a huge amount from the Far East and the US a lot of our goods are purchased using US Dollars and with a fall of over 15% since the Brexit vote then this is likely to impact the cost of what we pay for in the shops. Indeed, we saw ‘Marmite-Gate’ come to a head with Unilever and Tesco having a dispute but for Marmite lovers luckily this was just a 24 hour incident.
However, the problem with the value of the Pound is likely to cause problems for inflation with the costs for the consumer going up over the next few months as the impact of the Brexit vote hits the high street. The Pound vs the US Dollar is now at its lowest in over 31 years and at the moment this trend shows no sign of a slowdown.
Mark Carney has also said that the central bank’s job is not to concentrate on the value of Sterling but that ‘we are not indifferent to it, it matters to the conduct of monetary policy.’ Clearly the BoE is not too concerned with the Pound’s value as further falls will clearly help the British export market. Therefore, we could be in for further falls to come for Sterling against all major currencies towards the end of the year as the central bank are unlikely to intervene.
With the announcement that Article 50 will be triggered by March 2017 this has also caused the Pound to fall to its lowest level to buy Euros since 2011 and until we get some form of certainty politically then I think the Pound could fall even further.
If you’re in the process of buying a property in Europe prior to the end of this year then it may be worth considering buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.
Having worked in the industry since 2003 I am confident of not only offering you better exchange rates than your bank but also to help you with the timing of your transfer.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for further information or for a free quote and I look forward to hearing from you.
Tom Holian firstname.lastname@example.org
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