After more than seven years of static UK interest rates, the Bank of England surpassed market expectations last month by unleashing a barrage of stimulus measures to prevent the UK falling into recession after the historic Brexit vote. This included cutting the cost of borrowing from 0.50% to a record low of 0.25%, which sent Sterling tumbling.
In his press conference after the historic announcement, the governor of the Bank of England Mark Carney hinted that the central bank were open to cutting interest rates further, if data continued to slide.
With recent UK economic data however, such as manufacturing and services PMIs showing some signs of resilience in the UK economy, currency markets are debating now whether or not the central bank acted too quickly in response to the referendum result.
All eyes will be on the next Bank of England meeting, scheduled this Thursday 15 September, and further stimulus measures and another rate cut could devastate the pound against major counterparts. On the other hand, any upbeat comments and a hold on any further stimulus measures could help underpin its recent stable performance and potentially strengthen it.
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With the Bank of England meeting set to dictate the outlook of key currency pairs over the coming months, it’s important you’re on top of the latest movements. Call us to find out how you can make the most of your overseas money transfers and protect yourself against market fluctuations by calling us on +44 (0) 20 7847 9400.
The Currencies Direct team