You are here: Home - Uncategorized -

Sterling hits 25-year high

Written by:

With an interest rate rise firmly on the cards for May, Sterling soared yesterday to its highest level against the US dollar since 1982.

Figures released by the Office for National Statistics showed the steepest UK pay increases for two years at 4.6% year-on-year, indicating previously unsuspected inflationary pressure.

The pound thundered up to $2.0131 on the news, with many traders expecting Sterling to reach up to $2.06 today.

Looking further ahead, some experts believe further interest rate rises in the pipeline could mean the pound reaching up to $2.10 this year.

“We have got our sights set on $2.10,” said David Brown, economist at Bear Stearns. “There may be ups and downs but given the prospects for UK interest rates and the outlook for the dollar this has $2.10 written all over it.”
The minutes of the Bank of England’s Monetary Policy Committee, the body that sets interest rates, were also published yesterday. They revealed that the Bank was not expecting this month’s headline inflation figure of 3.1%, when they voted to maintain the Base Rate at 5.25% in April, although there was a three-way split among the members of the committee.
Of the nine members, two voted for a rise, seven to hold rates for at least a month, and one questioned whether an increase would be needed at all.
Despite the Bank of England’s forecast that inflation will drop off later this year, many analysts predict rise in interest rates next month of at least 0.25%, with some even suggesting a 0.5% increase would be in order.



Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Care fees are ‘dearer than Eton’ but help is at hand

One in four people questioned by Saga about the cost of long-term care for the elderly wrongly believe that the £25,000...