ChamberFX Valuable Insights
These valuable insights are provided by Damon Ellam, International Payments UK, MoneyCorp. Damon is our regional representative and will be providing useful monthly FX forecasts to help chamber members with their currency strategies.
Good Afternoon,
After last week’s Autumn Budget, sterling has held up well against most major currencies, helped by the Chancellor’s ability to calm markets in the short-term. Politically, though, the pressure on the government isn’t going away anytime soon unless we see a real turnaround in the data early next year: stronger GDP growth and lower consumer price inflation (CPI). History tells us that uncertainty around the Chancellor’s position tends to weigh on GBP and push gilt yields higher, especially when there’s no obvious successor. Looking ahead, the next big test for the Prime Minister will be the May local elections, so expect things to muddle along unless something dramatic changes.
On interest rates, markets are now pricing in cuts from both the US Fed (10th December) and the Bank of England (18th December), which would bring headline rates down to 3.75%. For the UK, the path looks fairly steady beyond that, with another 25bp cut likely in the first half of 2026 – though that will depend on inflation and growth holding up.
The US story is more interesting. A major shift could be on the horizon with a new Fed Chair coming in May 2026, appointed by President Trump. He’s made it clear he wants rates much lower, but markets don’t seem to have fully priced that risk yet. Current expectations for 2026 cuts are roughly in line with this year’s cycle (around 75–100bp), but if Trump gets his way, we could see something far more aggressive.
Please do let me know if I can help further with FX risk-management strategies for 2026 & immediate requirements for the remaining weeks of this year.
I hope everyone has had a fantastic year and felt well-informed and supported by me & the team here at Moneycorp. I am always keen to talk about areas we can improve the service, so please do reach out and let me know if there is anything further we can help with.
Thanks,
Damon.
Contact
For further information and advice on Hull & Humber's ChamberFX, or for assistance with your currency strategy, please click here or contact Lorraine Holt at l.holt@hull-humber-chamber.co.uk or call 01482 324976.
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