Money Transfer.co.uk

Compare money transfers, currency exchange and international transfer

Tue 10 Dec 2024 18:37GMT

Compare Money Transfers. Safe. Fast. Free.

A money transfer through a foreign exchange broker is the smart move. With excellent exchange rates and fee-free transfers, you could save time and money.

I need to send money...

Pound Sterling (GBP) Exchange Rate Plummets after BoE Inflation Report

Published: 12 Nov at 2 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Australian Dollar Exchange Rate, New Zealand Dollar Exchange Rate, Currency Exchange, Euro Crisis, UK, Exchange Rates, Economy, Inflation, Pound Euro Exchaneg Rate, Pound Dollar Exchange Rate,

The Pound Sterling (GBP) exchange rate experienced a rough ride on Wednesday as domestic developments saw it rise initially before plummeting across the board. The Pound was able to post moderate gains against several of its main currency counterparts early in the European session as the UK’s average earning’s figure surpassed expectations. The 1.0% year-on-year gain in wages in the three months through September beat forecasts for 0.8% growth and triggered a Sterling rally. That being said, gains in the British currency were limited by the news that the UK economy added fewer positions than forecast in the same period, resulting in an unchanged unemployment rate of 6.0%. There had been hopes that the level of joblessness would fall to 5.9%. The figures saw economist Rob Wood note; ‘UK employment rose in the three months to September, close to consensus expectations as a softer few months of jobs gains seems to have passed. While unemployment held steady in September, compared to consensus forecasts for a drop, there is every sign of jobless queues continuing to fall rapidly in the months ahead, with jobless claims down again in October and firms continuing to hire’.

The data fanned hopes of an earlier-than-projected interest rate increase from the Bank of England (BoE). However, such expectations were dashed after the BoE published its dovish quarterly inflation report. The central bank opted to cut growth and inflation forecasts as the downturn in the Eurozone and global economic tensions in Russia and Ukraine darkened the UK’s outlook. BoE Governor Mark Carney noted; ‘We’re seeing obviously lower demand for our exports, which has consequences, and we’re getting some imported disinflation from European exports. We compliment the colleagues there for the range of measures that they are putting in place.’ The BoE now envisages growth of 1.2% in 2014, down from expansion expectations of 1.9% in its previous report. Similarly, the UK economy is now forecast to expand by 1.4% in 2015 rather than the 1.7% hoped for initially. The report triggered widespread Pound Sterling weakness.

The GBP/EUR exchange rate fell by over 0.5%, the GBP/USD exchange rate dropped by 0.6%, the GBP/AUD exchange rate softened by 0.6% and the GBP/NZD exchange rate shed over 1.2%. Given that the rest of the week’s UK data is of fairly low importance, the Pound may be stuck in its downtrend for the rest of the week. Tomorrow sees the publication of the UK’s RICS House Price Balance report while domestic Construction Output figures will be released on Friday. Developments in the US and Eurozone could also impact the Pound in the days ahead.
Advertisement