8 March 2023 - Mann sees pound as vulnerable

In past periods of high inflation, the Bank of England has not had to sustain interest rate hikes for any length of time in order to bring it under control because the UK has a history of having relatively high interest rates, which meant that the point at which rates became restrictive is reached relatively quickly. That has not been the case during the latest rise in inflation, since rates had been allowed to fall close to zero as price rises had become benign as the developed nations of the world recovered from several crises. However, during and just following the Pandemic, there was a huge increase in fiscal support which saw the public encouraged to spend. A classic example of this was then Chancellor Rishi Sunak eat out to help out scheme. Because rates had been cut to almost zero. It has taken a significant length of time for them to begin to restrict demand. In fact, even after hiking at every meeting for fifteen months, short-term rates are only now reaching a neutral point. This means that small and medium size businesses are facing rising costs due to as yet untamed inflation, as well as paying increased rates on their overdrafts and other working capital facilities. 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.