The pound to euro exchange rate experienced yet another shortfall yesterday as election campaigns got underway. The Bank of England (BoE) is set to announce its latest policy report, though, with so little clarity about which party will be in power in January, key decisions surrounding tax and spending are likely to be placed on hold. A combination of election nerves and Brexit indecisiveness saw the pound lose any strength it had built yesterday. However, the BOE is expected to set out important clues today regarding “the likely path of policy” relating to various “political outcomes” according to the Financial Times.
The pound is currently trading at a rate of 1.1608 against the euro according to Bloomberg at the time of writing.
Michael Brown, Senior Market Analyst at Caxton FX, said: “Sterling ticked modestly lower on Wednesday, with election jitters persisting as formal campaigning got underway.
“Today, attention will shift to Threadneedle Street and the Bank of England’s latest policy decision.
“Policymakers are almost certain to keep rates unchanged, but will likely strike a more downbeat tone on the economy as Brexit and election uncertainties continue to dampen activity.”
READ MORE: Pound to euro exchange rate: Sterling ‘higher’ while ‘uncertainty mounts’ before general election [GRAPH]
As the election looms, the Monetary Policy Committee will meet today to cast their own vote on the financial future of the currency.
According to the Financial Times, policymakers are unlikely to vote for much change with the UK’s economic “fogbound”.
However, their decision could be a nod towards the future.
Though interest rates are unlikely to move at present, the Financial Times also suggests “the BoE’s forecasts are still likely to point to a need for interest rates to rise eventually”.
So, what does all of this mean for British holidaymakers jetting off to Europe in the near future?
The Post Office is currently offering a rate of $1.1275 for £400 or more, or a rate of $1.1450 for £1,000 or more.
Amid all of the uncertainty, research has shown that Britons are fearful of the impact of political changes on their travel money.
The report was carried about by peer-to-peer travel money provider We Swap, who discovered that 54 percent of British holidaymakers say their biggest concern is how the UK’s departure will affect the cost of foreign currency.
A further 15.6 million think their annual holiday will take the greatest beating from the move.
However, a financial expert spoke with Express.co.uk to reveal one way Britons can make sure they don’t lose out unnecessarily.
According to WeSwap’s research, only nine percent of Britons change back their leftover currency, totalling a whopping £2.5billion left unused.
Stross said: “It is near impossible to predict how the pound’s value will change, however, it does pay to be aware of any upcoming political events which could affect the pound’s value so that holidaymakers can prepare as much as possible for any outcome.”
He added: “With the exchange rate fluctuating so much recently due to Brexit, travellers returning may be able to get more from their money they have done recently, so it is worthwhile looking at your options when you return to make sure you’re not sat on a small fortune.”
