Bank of England results voting 7-2 in favour of keeping the current level

Midday yesterday, Bank of England results showed the bank’s monetary policy committee voting 7-2 in favour of keeping the current level, therefore maintaining the current 0.75% interest rate. Immediately following this decision we saw a brief increase in the strength in the pound with sterling trading slightly higher against the dollar. However, this increase did not last long with a downgrade in the growth forecast being released and a prediction in a rate cut being more likely than a rate hike next year.

Adding to the weakening of the pound as we lead up to Christmas week, yesterday’s retail sales figures were not as expected with statistics showing November 2019 three month on three month movement decreasing by 0.4%. With results showing a decrease of 0.6% in November 2019 compared to October 2019, with only household goods stores to report growth. This has been the first decrease in retail sales since April 2018.

Yesterday’s markets showed the GBP/EUR drop below 1.17, dropping five cents in five days.

Today Boris Johnson will be proposing legislation amending the withdrawal bill, making it illegal to extend beyond December 2020. The increased risk of no deal is likely to have a negative effect on the pound.

We can not be certain as to what the future holds for the pound, however with the volatility of the markets and the decrease in strength of the pound we have seen this week it is sure that the volatility does not settle here. Although the disappointing drop seen this week, the pound is still in a strong position compared to recent months. Therefore why wait for the risk of this worsening, here at currency Index you can secure the current rate through our spot contracts, or, If you do not have the funds readily available, chose our forward contract and only pay a 10% deposit today.  With 2020 being a year of uncertainty, enter the volatile year with little risk, call us today so we can put your mind at rest and give you a Christmas with no woes.