Good afternoon,
We start the morning with GBP/EUR trading at 1.1966, the highest it has been in 5 days. The pound has outperformed the euro by 1.34% in the last week and outperformed the US dollar by 0.34% in the same time period. A key driver of pound strength has been the change in the Bank of England’s policy stance. The Bank of England have said that increasing energy prices and the subsequent squeeze on incomes is likely to put downward pressure on domestically generated inflation. The drop-in demand for household consumption along with business investment could be seen as factors that cause experts to re think their inflation predictions for May. This may potentially be enough to act as a substitute for further rate hikes.
Have a good day.
Josh Saunders, Senior Relationship Manager.
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