Figures showing August’s retail sales growth were better than expected have fuelled expectations that the Bank of England will hike interest rates providing a potential boost for businesses
A SURGE in British retail sales increased expectations the Bank of England will lift interest rates – and had a positive impact on the pound’s performance.
Sterling was up at $1.352 against the US dollar this morning – a 0.06 per cent rise – after figures showed August’s sales growth was better than had been forecast.
The Bank of England kept interest rates at 0.25 per cent, in September but it signalled that there could be a rise in the future, which sparked an another upturn in the pound’s fortunes.
The Bank last increased rates from 5.5 per cent to 5.75 per cent in July 2007.
By March 2009 they had been slashed to just 0.5 per cent as the financial crisis sent the world’s banking system into meltdown.
Rates fell again last summer — to 0.25 per cent — after the EU Referendum.
The Bank, led by Governor Mark Carney, announced September rates were being held at 0.25 per cent.
But minutes from its rate-setting meeting revealed its nine-strong panel fear a rise may have to be announced soon.
CASH IN How to get the best deal on YOUR holiday money…
How to get the best holiday money rate
WE spoke with Hannah Maundrell, editor-in-chief at money.co.uk to find out how you can guarantee the best rate when you go on holiday
- Don’t buy cash at the airport – you’ll always be able to beat the rate with a bit of forward planning
- Compare travel money companies online – Factor in delivery costs and choose the option that gives you the most cash to spend on holiday. If you’ve left it until the last minute order online for airport collection so you get the best of both worlds.
- Use comparison tools – MoneySavingExpert’s TravelMoneyMax enables you to compare pick-up and pre-order rates.
- Don’t pay for travel money with a credit card – it’s likely you’ll be charged a cash withdrawal fee which adds to the cost.
- Top up a prepaid card to lock in your rate now – Choose your card and read the T&Cs carefully as some apply hefty fees. WeSwap, FairFX and Caxton FX are all worth checking out.
- Always choose to pay in the local currency rather than sterling – This will help you avoid sneaky exchange fees
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