Bank of England hold interest rates

Yesterday afternoon Bank of England Governor Mark Carney released information about interest rates in the UK. He has taken action to hold interest rates in the UK for this month at least with the majority of the Monetary Policy Committee voting to keep interest rates as they are apart from one member voting to decrease the current rate. The markets were very much active within the hour of the information being released to the public as Sterling Spiked up over a cent on both the Euro and the US Dollar but as more information was divulged this spike was short lived almost returning to the rates which opened the mornings trading. This was due to caution from the Bank of England warning that an interest rate cut was not out of the question yet and could be as soon as August that we see drastic action taken by the BoE. This warning paints a dull picture for the future stability for the Pound as analysts are now predicting that a cut is indeed on the horizon this summer, not the bright summer some would have liked.

The next 4 weeks could be vitally important for the Pound as Theresa Mays first month as Prime Minister could be a busy one as question about Brexit will be asked and potentially answered with our exit possibly set in stone with Article 50 to be invoked and to add to Sterling demise a possible interest rate cut which would further harm the Pounds status in the currency market. Sterling has already reached 30 year lows on the Dollar and also edging toward a 3 year low against the Euro so with Article 50 and an interest rate cut this could further worsen in the near future.

With this uncertain weeks ahead of us it may be worth taking advantage of these current rates as they can deteriorate very quickly as we have seen these past few weeks. With it being Theresa Mays first full week in office it is expected that there will be mass speculation surrounding the plans of coming out of the Eurozone, also Boris Johnson is back with a bang on the political scene too as he was made foreign secretary by Theresa May, as soon as the press catch up with the brexiteers campaigner there first question on reporters lips will be, what now? Any information released you can bet that the currency market will be reacting to the news. Would you want to take the risk of losing out on the rate should there be a negative approach? Please call today to discuss your options with your account manager here at Currency Index.