EUR GBP Back Near the Yearly Lows on Rate Hype

The EUR GBP exchange rate was lower by -0.22% on Tuesday as investors try to catch up with the projections for an increase in UK rates by year-end. While many have speculated a December hike, Goldman Sachs said November may be more likely. Today’s inflation release form the UK economy should help to decide the issue.

The EUR to GBP is trading at 0.8435 after a bounce yesterday failed to take hold.

High Net Worth Individuals Positive About UK Economy

High-net-worth-individuals (HNWIs) in the UK have a positive outlook for the prospects of the economy but are less confident about their own money, according to the inaugural Saltus Wealth Index.

The Saltus Wealth Index surveyed over 1,000 people in the UK with investable assets of over £250,000 about their feelings on the UK economy, their own wealth and what matters most to them personally.

The research found that 80% of respondents have confidence in the future of the UK economy with a third 33% feeling “very confident”. However, this decreases with age, with just 5% of over-65s saying they feel ‘very confident’ compared with nearly two fifths between 18-54.

The recent turmoil in the UK economy would have some worried that HNW individuals would be looking for pastures new, but the latest data does not suggest that.

The UK economy has been under inflationary pressure and the BoE are predicted to move on interest rates as early as November.

Markets have bene frantically pulling forward their rate hike expectations in the last week and today will see the release of the latest inflation report. The year-on-year number is expected to stay steady at 3.2% but a move higher would spark further gains in the pound sterling.

Goldman Sachs have said that November is more likely for a rate rise due to the fact that the meeting includes a press conference and updated economic prospects from the Bank of England.

European commission considers Polish ‘rule of law’ action

European Commission president Ursula von der Leyen has listed three options for taking action against Poland after a recent ruling by the Polish Constitutional Tribunal on EU law.

The court caused controversy with the ruling, which did not say that the Polish constitution always takes precedence over EU law but concluded that certain articles in the EU treaty are not consistent with its constitution.

Von der Leyen expressed her concern with the ruling and said that she has instructed the Commission’s services to study the ruling.

The decision by the court led to fears that Poland could eventually be forced to leave the European Union.

In her speech she listed the three options on the table: infringements, rule of law mechanism and the Article 7 procedure.

“Polish people must be able to rely on fair and equal treatment in the judicial system, just like any other European citizen,” Von Der Leyen said.

The issue could weigh on the euro if the EC takes action against Poland.

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Source: https://www.eurorateforecast.com/2021/10/eur-gbp-back-near-the-yearly-lows-on-rate-hype/