The popular view in the markets currently is that the Bank of England will call a halt to its long-running programme of rate hikes in May after raising short term rates once more.

There is a degree of optimism about the economy which is leading commentators to believe that the bank won’t need to cut interest rates to stimulate the economy unless there is any further fallout from the recent collapse of two U.S. banks which has precipitated a liquidity crisis.

The Central Bank is trying to encourage companies to invest in their businesses. The level of purchases of new machinery and plant by businesses of all sizes has not really recovered from the near collapse that was seen during the Pandemic.

No matter how much confidence grows that the Government is now on the right track, with inflation falling which will lead to an increase in real wages, there is still the political uncertainty generated by opinion polls which still put the Labour Party well ahead and therefore barring some unforeseen disaster likely to be elected to power after thirteen years in opposition early 2025.

Following the somewhat bizarre events of last summer that followed the election of Liz Truss to succeed Boris Johnson as Conservative Party leader and Prime Minister, the country is gradually returning to its more traditional beliefs. The first is that under a Labour Government, public sector borrowing rises considerably as investment increases in services and social care.

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.