Pound Strength Means We’re All Going on a Summer Holiday
It’s been a difficult year for the euro, and this has had positive repercussions on sterling, which has seen a year of highs for the British currency. But can the good luck last for Brits looking to make the most of their money? Our Hertford financial advisors explain why this year might be a great time to invest in that dream Caribbean cruise.
A Real Windfall
This summer saw the Bank of England hand Britons holidaying in Europe a windfall as the prospects of higher interest rates sent the pound to a seven-and-a-half-year high against the euro.
In the midst of the Greek crisis, and a number of other European nations struggling, the single currency was already struggling. With the pound pegged at 0.5% interest, the Bank of England has been extremely cautious to inflate sterling, though the constant rumour of a hiking inflation rate has sent the pound skyrocketing.
This week, the Bank of England’s Mark Carney caused a stir after announcing at a press conference that the interest rate would continue to be maintained at at 0.5.
The news caused the pound to dip slightly, but not enough that British holiday-goers in Europe should feel worried about the amount of euros they will be exchanging their pounds for at their destinations.
The Bank of England has already forecasted that the British economy will continue to expand at a steady rate for the next two years – at 2.8 per cent in 2015, and 2.6 per cent in 2016, according to the Inflation Report projections.
Only one of the eight involved in the Monetary Policy Committee decided against the idea of maintaining the existing benchmark rate; economists predicted at least a quarter would vote in favour of a rise, so the news came as a surprise, therefore creating a disturbance in the markets.
Time for a Holiday
So what does this all mean for British tourists considering that dream holiday? If you’ve got savings and you’re looking to spend some of it abroad, the pound is still going strong against the euro, despite this week’s blip.
So what are you waiting for, speak with one of our Hertford financial advisors about how you can maximise your savings to ensure your trip is as memorable as it can be.