Bank of England Set for Third Rate Cut ?
Bank of England Governor Andrew Bailey and the MPC are set to cut interest rates for the third time today reducing the base rate of interest from 4.75% to 4.5%. Markets are expecting an 8-1 vote from the Old Lady, with a further 2 rate cuts scheduled for this year.
There remains concern over inflation trickling higher of late, however weaker growth forecasts appear to have forced the banks hand to provide relief ahead of Rachel Reeves tax increases in April.
There is substantial risk that Trump’s tariffs could spike inflation levels globally, affecting price rises in the UK, traders will look for comments from Bailey to assess what impact this could have. Stagflation fears remain a challenge for the Bank as it tries to strike a balance between supporting the economy and halting inflation.
Sterling is already 0.5% lower this morning against the Dollar ahead of the lunchtime decision, with the FTSE 100 rallying higher.
With the Dollar index rising 7% since September, corporate treasuries are hedging against further dollar surges. Many analysts expect Trump’s trade policies will shore up US economic growth and help the Greenback strengthen further.
Gold in the Bank of England’s vaults is being sold off at a discount as the queues lengthen to withdraw metal, as the scramble for bullion heightens amid a US Gold Rush.
Gold held by US firms are up 88% since Trump won the election in November. In order to attract wider investors, UK bond dealers are under pressure to sell fewer long dated bonds as the UK’s sovereign market totals a mammoth ￡2.6trillion (4th highest in the world).
In Panama, the canal authority has doubled down on Trump’s threats to take the crossing by denying claims by the U.S that their vessels could cross the canal without paying fees. Trump has accused Panama of charging excessive fees blaming influence from China.
领英推荐
Royal Navy officers are warning UK PM Starmer that UK planes will be at threat from China with a new Chagos Islands deal, as Chinese spyware and missiles are handed to Mauritius.
Buying A Car From Abroad: A Guide to International Payments
Buying internationally can give you access to unique and rare cars you might not find at home. But dealing with international payments and currency exchanges can be challenging. In this post, we’ll guide you through the process of buying a high-end vehicle abroad and show you how an FX broker can help make those international payments easy.
Get In Touch
If you have any currency related questions about how news shared in today's Daily Focus could affect your business, please contact your portfolio manager or reach out to our team using the details below.