We asked the team at HiFX for their thoughts on the current market situation and here’s their Market Commentary as of 25/03/14.
“The main focus this week for the UK economy has been the latest Consumer Price inflation figures. The data released on Tuesday showed that inflation in the UK hits a four year low at 1.7%, below the Bank of England’s 2% target.
Whilst falling inflation eases pressure on living standards, there is a long term risk that if the public believe that prices are likely to fall, they may hold off on new purchases believing that they may get cheaper in the future. We are not expecting the UK to move to a deflationary position but it does highlight that the UK is still facing similar issues to the Eurozone who are also struggling with the falling levels of inflation. This helps explain the flat range we have seen against the Euro where both economies are in a similar position.
Easing price pressures does not help the bank of England keep monetary policy loose for a while to come as there doesn’t seem to be any need to use rising interest rates as a toll to cool down the economy. They will, however keep a close eye on the UK house prices which have risen 6.8% in the last 12 months..”
For all your foreign exchange requirement you can contact the HiFX team at their Costa Blanca office via telephone +34 965 978 952 / +34 711 762 922 or by email costablanca@hifx.co.uk