Editor’s Note: The Pound is up 2.4 per cent in a year against the Euro, reducing the cost of buying a Spanish home by thousands, if not tens of thousands of Pounds, for cash buyers from the UK. It is, however, bad news for British vendors trying to sell their home in Spain. Foreign currency exchange specialist Luke Trevail looks at the factors driving exchange rates, and what the near future might hold.
By Luke Trevail of TorFX
With a distinct change in the seasons, the UK economy and the Great British Pound have sprung into life throughout April.
The retail sector has shown the strongest growth and life is being seen in the manufacturing industry with solid progress being reported once again.
Growth in our economy is awaiting a further boost as earlier on this month the Office of National Statistics confirmed that weekly earnings have finally risen to a point where they have now caught up with inflation. This lends weight to the opinion that for the next three months at least the outlook is exceptionally strong according to the Confederation of British Industry (CBI).
Continual growth and the pound strengthening are two important developments that we’ll be expecting to see moving forward it would seem and the GBP-EUR rate is now above €1.20 once again. It’s been commonplace that other times we’ve seen this key level broken that the pound retraces and moves back down into €1.15-1.19 range. It remains to be seen if we kick on from here but all indicators are that in the medium to long term rate of €1.20+ will be where we are trading for the remainder of 2014.
Good news then it would seem, but a warning to anyone expecting the rates to skyrocket from here: the UK economy and Sterling is a fickle beast and things can easily change against you. Keep in contact with your currency dealer and watch the rates carefully.