Published On: Fri, Sep 14th, 2018

Pound to euro exchange rate: UK interest rate holds and affects sterling | Travel News | Travel

The pound has picked up against the euro to end a difficult week for the exchange rate.

Currently, it is trading at €1.121, up from figures yesterday of €1.120.

Currency analyst at TorFX Laura Parsons explained the movement of the pound from yesterday.

She told “Unfortunately yesterday’s Bank of England (BoE) interest rate decision failed to spark any positive pound movement, with the central bank’s outlook unchanged from August.

“The euro, meanwhile, wasn’t fazed by the news that the European Central Bank (ECB) had lowered its growth forecasts and instead strengthened slightly as the ECB confirmed its commitment to bringing an end to its quantitative easing programme.”

The UK interest rate has remained at 0.75 per cent after being increased in August.

It was raised from 0.5 per cent to the current rate last month for the second time in almost a decade.

The interest rate was previously raised from 0.25 per cent to 0.5 per cent in November 2017.

However it could increase again before the UK leaves the EU in March 2019.

The interest rate has held following the uncertainty of Brexit, following a government paper revealing worrying concerns regarding travel in the case of a no-deal Brexit.

Passport holders could need at least six months on their passport to enter the EU, something other countries such as Egypt and Thailand currently require.

UK driving licenses could also be invalid for driving across Europe.

Ryanair boss Michael O’Leary warned that while flights from the US and Asia would still fly, planes could be prevented from landing in the EU for a temporary period.

This could cause travel chaos in the UK if flight regulations are not put into place before the transition period.

Ms Parsons also explained how the pound could move by the end of the week.

“The GBP/EUR exchange rate is currently lingering on the edge of €1.120,” she said.

“While the data calendar is pretty empty today BoE Governor Mark Carney’s speech might inspire some GBP fluctuations before the weekend if he has any fresh comments to make.”

Bank of England Governor Mark Carney spoke out by claiming leaving without a deal could cause another financial crash similar to 2008.

This could mean house prices drop by up to 30 per cent over three years.

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Pound to euro exchange rate: UK interest rate holds and affects sterling | Travel News | Travel