Pound to euro exchange rate – Sterling bounces back before Bank of England governor Mark Carney speaks to treasury select committee
Sterling was strong against the euro before Mr Carney is questioned about inflation and interest rates.
THE pound was flying against the euro this morning (Tuesday October 17) ahead of Mark Carney's appearance before the Treasury Select Committee.
Sterling was trading at €1.1283 - a 0.44 per cent rise - before the Bank of England governor is questioned about inflation and interest rates.
Indications from Mr Carney that interest rates could rise could provide a major boost for the UK economy.
The pound dramatically plummeted last week after EU negotiator Michel Barnier said the latest round of Brexit talks had ended in “deadlock”.
He told reporters: "On this basis I am not able in the current circumstances to propose next week to the European Council that we should start discussions on the future relationship."
Sterling fell from €1.116 to €1.109 within a few hours, but rallied when it was reported Barnier was willing to offer the UK to a two-year transition period.
What has happened to the euro conversion rate in the last few months?
The pound has seen a decline of almost 9 per cent against the euro since April this year and 12 per cent since the Brexit vote.
Recently the sterling rate has remained below €1.08 - last reached in October 2009 - as fears around Brexit negotiations grow and relationships in the Pacific become fraught.
A recent rally on the currency comes after data from the Office for National Statistics (ONS) showed the Consumer Price Index (CPI) measure of inflation hit 2.9 per cent in August, outstripping economists' expectations of 2.8 per cent, thanks to higher clothing and fuel prices.
This has fuelled speculation that the Bank of England could hike interest rates to cool down consumer spending and combat rising prices.
Meanwhile, analysts think traders are awaiting signs of better relations in Brexit talks before upgrading the pound against the euro, as they think there will be more pressure for the pound in the short term.
Experts had predicted the pound and euro would hit parity by next year, with US bank Morgan Stanley revealing it would be the first time the currencies would be at equal value in the single currency's 18-year history.
Where is the best place to get euros?
Euros can be bought at supermarkets, the Post Office and currency specialists - but rates vary massively.
The best rates can often be found at specialist online outlets, such as Travelex, which will deliver your cash directly to your home.
Alternatively, FairFX offers currency cards which you can load up with sterling and then spend abroad like a debit card.
Travellers can use comparison sites, such as MoneySavingExpert's , to find the best rate.
If you order in advance and pick up the cash then you'll most likely get a better rate than if you walk in.
You can also buy last-minute currency at the airport, but expect to be hit with poor rates.
It's almost always much cheaper to buy your currency before you get to the airport.
The rates you'll see above are the "spot" currency rate that is traded on the market.
These are different to the rates offered by currency exchange businesses, but changes in the spot rate do have an effect on how much cash you get.
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
