UK tourists who are flying to either the USA or Europe this summer have been warned to exchange money NOW. British holidaymakers jetting off to the European Union have been urged to exchange cash and swap pounds for Euros and dollars soon.
One pound equals $1.30, a high not seen in more than a year, and €1.1915, a near two-year high. “It’s a huge change compared to how hated it was,” said Janet Mui, head of market analysis at RBC Brewin Dolphin, in a statement issued today.
Kathleen Brooks, research director at XTB, said: “The growth outlook is brighter and the real interest-rate differential is there. The pound is not seen as a risky currency any more.” It comes as inflation has remained unchanged at the Bank of England target of 2% as millions of homeowners wait to see if interest rates will be cut next month.
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Darren Jones, Chief Secretary to the Treasury, said: “It is welcome that inflation is at target, but we know that for families across Britain, prices remain high. We face the legacy of fourteen years of chaos and economic irresponsibility. That is why this Government is taking the tough decisions now to fix the foundations so we can rebuild Britain and make every part of Britain better off.”
Wednesday’s annual consumer price data was above analysts’ forecasts of 1.9 per cent and remained at the BoE’s target level, which it hit in May. It was the last such release before the Monetary Policy Committee’s August 1 rates announcement.
The MPC is due to decide whether to cut interest rates from their current 5.25 per cent, with some members expected to call for a quarter-point reduction. Personal Finance Analyst at Bestinvest by Evelyn Partners Alice Haine said: “A lower and more stable inflation rate is a boon to households and the wider economy, particularly for a new Labour Government focused on growth and looking to inject some momentum into the country; it signals to consumers and businesses that these are more predictable economic times, removing the fear that comes when purchasing power is being heavily eroded by runaway price rises.”
