The strength of a currency can say a lot about the health of the economy to which it belongs. Business analysts keep a careful watch on the currency exchanges, and yet finding a level that pleases most people can be a hard balancing act. A recent report by Reuters looked at a caveat issued by a senior Bank of England policymaker. Here, Glowing Global review this report, and look at how important currency and inflation are to businesses of all sizes.
“I always keep an eye on the currency figures, as well as watching how the stock markets are doing”, said Ricco Katona, director of Glowing Global. “I encourage all entrepreneurs to do the same. By keeping as informed as possible about the factors which affect the world of business, you can become more resilient, and plan ahead more accurately.”
The report centres upon remarks made by Kristin Forbes. She is one of the newest policymakers at the Bank of England, having joined in July. She warned that whilst sterling was proving resilient and trading at strong levels, there are still strong inflationary pressures on the UK. The stability of interest rates has been praised by many, but criticised by some analysts who say that an interest rate rise is needed to speed up economic growth. As a new addition to the nine strong Monetary Policy Committee, analysts have been wondering if she will join the two committee members who have already thrown their weight behind an interest rate hike.
Kristin Forbes refused to be drawn on this speculation, simply saying that inflationary pressures on a strong sterling were likely to peak at the end of the year. The Sterling has grown by 14.5% against many currencies between March of last year and July of this, but Forbes stressed that was not out of line with what was expected, and that it had not as yet substantially affected trading volumes for UK businesses.
“A strong pound reflects a healthy, confident and growing economy, but it can also make it difficult for companies who export goods abroad”, said Ricco Katona. “Businesses will have to adopt a wait and see policy as they try to establish whether interest rates will be increased by the Bank of England. It’s always important for businesses to remain as flexible as possible, but especially so in the current climate.
Glowing Global provides bespoke marketing solutions for businesses across all sectors. They can help companies increase their brand awareness and acquire new customers, whether the interest rate rises or stays the same.