±JOIN OUR NEWSLETTER
Get useful expat articles, health and financial news, social media recommendations and more in your inbox each month - free!
±Compare Expat Providers
±Expat Focus Partners
±Latest Financial Articles
· Halloween Traditions in Countries Across the World
· Expat Focus Financial Update October 2017
· How To Make The Most Of Your Retirement Abroad
· Expat Focus Financial Update September 2017
· 10 Things To Think About Before You Move Abroad In Your Middle Age
· Expat Focus Financial Update August 2017
· What Could Higher Interest Rates Mean For Your Overseas Property Purchase?
· Expat Focus Financial Update July 2017
· The Lifestyles And Cultures Of Great Expat Locations
Foreign Exchange Update 12/11/13
The following update is provided by the official Expat Focus foreign exchange partner, World First. To request further currency transfer information or a no-obligation quote please click here.
Inflation continues to slow in Europe, UK data due
· GBP lower pre-BOE inflation report tomorrow
· German CPI falls by 0.2% in October as expected
· UK inflation set to fall to 2.5% from 2.7% in September
GBP slipped once again yesterday in the lead-up to tomorrow's Bank of England Inflation Report as more and more investors start to doubt how bullish the Bank of England will be on the UK economy. New growth, inflation and unemployment forecasts are expected and it seems that a positive outcome is not fully priced in with traders now showing a bit of caution.
Those who took part in our Bank of England and ECB webinar on Thursday will have heard us talk about our unease with where markets are starting to price in rate hikes for the UK. Short sterling contracts, bets on what the Bank of England base rate will be at certain points in the future, are currently looking for a 25bps hike in around Q3 of next year. The BOE up until now has been clear about keeping rates low until 2016. Something has to give and this uneasy relationship is the one that holds the key for sterling moving forward.
We will receive the latest news on one of the Bank’s forward guidance ‘knock-outs’ this morning with the publication of the latest CPI data from the UK. Inflation has not been as large a problem as some economists, ourselves included, had originally thought and the news that CPI is slipping closer to 2.0% than 3.0% will come as welcome news to most. The disparity between wages remains clear however, and as a result, we expect inflation to remain under control without Bank of England intervention.
As we said on Friday, the ECB’s decision to cut rates last week will have helped the Bank keep interest rates lower, however. We now have an ECB with a lower “main” rate than the BOE for the first time since 2008. This divergence of monetary policy – a “cutting” ECB and a “hiking” BOE – should engender a higher GBPEUR rate and bring with it a lower CPI rate via lower imported inflation. Lower inflation means less pressure on rates in the short term. That’s our thinking anyway.
CPI is expected at 2.5%, down from 2.7% in September, and is released at 09.30.
Further news from the housing market saw the RICS house price index rise to the highest level in 11 years in October. 57% of chartered surveyors are seeing increasing prices compared to 54% in September with the gap between demand and supply at over a 4½ year high. If supply continues to lag demand by this much, then even a GCSE economics student will be able to tell you what will happen.
Inflation has slipped in Germany once again, increasing chatter about disinflation and eventual deflation in the Eurozone. German CPI slipped by 0.2% with prices rising 1.2% from a year ago. The combination of slowing price increases and disappointing growth numbers due this Thursday are justification enough for the rate cut last week.
Need currency transfer or foreign exchange help?
See how much money you could save with a no-obligation quote...
- Forum Legend
Expat Health Insurance Partners
Our award-winning expatriate business provides health benefits to more than 650,000 members worldwide. In addition, we have helped develop world-class health systems for governments, corporations and providers around the world. We want to be the global leader in delivering world-class health solutions, making quality health care more accessible and empowering people to live healthier lives.
Health is your number one priority. At Aviva we understand this, which is why we’re focused on helping you and your family access high quality healthcare at home or overseas. Our award winning medical insurance will help you get the treatment you need or simply provide guidance and advice wherever you are, 24/7.
At Bupa we have been helping individuals and families live longer, healthier, happier lives for over 60 years. We are trusted by expats in 190 different countries and have links with healthcare organisations throughout the world. So whether you're moving abroad for a change of career or a change of scene, with our international private health insurance you will always be in safe hands.
Cigna has worked in international health insurance for more than 30 years. Today, Cigna has over 71 million customer relationships around the world. Looking after them is an international workforce of 31,000 people, plus a network of over 1 million hospitals, physicians, clinics and health and wellness specialists worldwide, meaning you have easy access to treatment.