GBP exchange rates climb as focus turns to the Bank of England this week

The Bank of England is expected to increase the base rate of interest for the 12^th consecutive time this Thursday, taking the base rate up to 4.5%.

An increase of 0.25% is expected, as the Bank of England continues its struggle to contain high inflation levels. Britain has the highest level of inflation within the G7 group of advanced economies and inflation remains above 10% despite the Bank of England targeting 2%.

Increasing interest rates often strengthen the underlying currency and this is a pattern we’ve seen in recent weeks, as GBP/USD has climbed to towards the highest levels of the past year.

The GBP/EUR exchange rate has also seen some gains recently, with the pair testing the 1.1500 mid-market level this morning for the first time since early December of 2022. This leaves the current trade levels sitting at a 6-month high.

If the Bank of England hikes rates as expected this Thursday to 4.5%, it may not be the end of the BoE’s rate hiking cycle.

This week investment bank Goldman Sachs has warned that the base rate could reach as high as 5% in order to counter the stubbornly high inflation levels Britain is facing.

This could push the Pound higher so it’s worth following the BoE’s interest rate decisions. If you would like to be kept up to date regarding interest rates or price spikes for the Pound do feel free to register your interest with us.

Another important data release out of the UK will be this Friday’s GDP release, which covers economic output in the UK for both March and the first quarter of this year.

If you would like to discuss an upcoming currency transfer you plan on making, do feel free to get in touch regarding your plans. We will be happy to offer insight, quotes, and also highlight the upcoming economic releases which could impact the currency pair you’re focused on.

You can contact me (Joe) directly on [email protected] with an outline of your plans, and I’ll be happy to offer insight and prices.

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