Yesterday saw the pound lose further footing against both the dollar and the euro, with the fuel crisis showing no signs of abating just yet. Despite Boris Johnson’s best efforts to reassure the British public, sterling continues it’s battle to stabilise against the euro having managed to do that somewhat whilst sitting at levels of 1.1575 at the time of writing.
Whilst the surge in energy prices continues on the upwards trajectory, many analysts fear that a difficult path lies ahead for the pound over the coming winter months. Economic recovery for the UK could be severely stunted by the continued gas shortage and panic buying of fuel witnessed over the past week, with the potential for the Bank of England to be left with no choice but to hike interest rates in an attempt to try and fight off inflation.
After two days of sustained heavy losses, the GBP-USD rate looks to have finally stabilised somewhat having reached nearly 10-month lows, sitting in the 1.3420’s by market close. A close eye will need to be kept on the Bank of England and the Federal Reserve over the coming week for announcements on how they plan to confront this growing crisis.
Have a good day.
Holly Tobia-Parkyn, Senior Relationship Manager.
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