The pound could shift dramatically today when the Bank of England (BoE) delivers their latest interest rate decision.
The announcement could result in the rate climbing if the central bank will raise interest rates soon.
Alternatively, the pound to euro exchange rate could well be sent plummeting.
According to Bloomberg, the pound is currently trading at €1.138 against the euro.
Laura Parsons, currency analyst at TorFX, spoke to Express.co.uk regarding the latest exchange rate figures.
Pound to euro exchange rate: Today’s Bank of England’s interest rate decision could send rate plummeting
‘We haven’t had much in the way of UK data to sink our teeth into this week, but we’ve finally got something juicy to look forward to today, with the Bank of England (BoE) set to deliver its latest interest rate decision.
“If the BoE meeting minutes support the idea that the central bank will raise interest rates in the near future the pound could climb.
“Conversely a dovish outlook could send the GBP/EUR exchange rate to fresh weekly lows.”
Yesterday the pound saw a minor decline against the euro, with the exchange rate hitting €1.136 – the lowest level in a week.
The political environment and latest Brexit decisions continue to affect the rate.
Pound to euro exchange rate: Today’s Bank of England’s interest rate decision could send rate plumme
Pound to euro exchange rate: According to Bloomberg, the pound is currently trading at €1.138
“The pound continued its downtrend on Tuesday as the UK government’s Brexit bill was defeated in the House of Lords,” Parsons said yesterday.
“Today’s reports from the Confederation of British Industry (CBI) could have a modest impact on GBP/EUR in the absence of any more notable data.
“But speeches from European Central Bank officials may prove more influential ahead of tomorrow’s Bank of England (BoE) rate decision.”
The majority of investors aren’t expecting the Bank of England to raise the base rate in the next three months, according to the Q2 Investor Barometer from Assetz Capital.
The peer-to-peer lending platform canvasses the views of its investors every quarter, and they were asked if they think the Bank of England will raise rates from 0.5 per cent in the next three months. 52 per cent believe they won’t, while 25 per cent think they will, with 24 per cent not sure.
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The base rate has remained at 0.5 per cent since March 2009, apart from falling briefly to 0.25% between August 2016 and October 2017.
Stuart Law, CEO at Assetz Capital said: “Our investors don’t believe a rate rise will be forthcoming given the current economic climate.
“Until the economy picks up significantly interest rates will remain low, but we won’t see an economic turnaround until the government understands properly what will fuel it – which is easily accessible growth capital for ambitious businesses that will grow jobs and wages.
“When the base rate rises, so should savings rates. But history shows us that this very rarely fully happens with banks holding back part of the base rate rise for themselves.
“Unfortunately savers’ expectations that high-street banks may provide returns that outstrip inflation are likely to be found wanting in the months and probably years to come.
“It must be galling for people to hear Mark Carney, the Governor of the Bank of England, already anticipating rates falling again if the currently expected disorderly exit from Europe happens – and that could mean negative interest rates this time around.”