20/11/08 London-This morning’s UK Retail Sales figures showed a 0.1% drop in October – which was much better than analyst’s predictions of a 0.8% drop.
Despite the better than expected figures, Sterling exchange rates have failed to improve. Normally, positive figures would boost the Pound – and after all, Retail Sales are still up on last year.
Why the lack of improvement? Perhaps some scaremongering in the press (the BBC’s headline showed “Retail Sales fall 0.1%” without mention of the lower expectations) and it seems no news is good news at the moment.
For consumers needing to transfer money overseas, this is worrying. Every bad news release is hurting the Pound, so what will it take to mount a recovery? Euro exchange rates are now at their lowest ever, and if you are buying US dollars the rate hasn’t been worse since 2002.
Earlier this month, interest rates were cut by 1.5% in the hope of giving consumers more money to spend in the run up to Christmas, but it looks unlikely there will be an improvement in economic conditions before the new year, and further interest rate cuts could follow as early as December.
Therefore, particularly for overseas property buyers, it might be wise to secure your exchange rate in case things get worse before they get better. Using a specialist foreign exchange broker can save you money and time, as well as helping you understand the currency markets to time your purchase as best you can.
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