Pound nears 14-month highs against USD as rate hike looms.
The Pound has maintained a strong position close to fourteen-month peaks against the USD, driven by market expectations of an upcoming rate hike by the Bank of England. The central bank has been focused on preventing inflation expectations from becoming entrenched in the domestic economy and is set to announce its monetary policy decision on Thursday.
Analysts anticipate a 25 BSP increase as expected, potentially pushing it up to 4.75%, the highest level since April 2008. This decision will follow the release of UK inflation figures, which are expected to show a significant rise in both the broad Consumer Price Index and the narrower ‘core rate’ compared to the previous year.
The anticipated outcomes align with expectations of a rate hike, most likely resulting in a further strengthening of the Pound, although as always, the real clues will come from the following commentary from the BoE.
The focus remains on these two major events later in the week. The Pound is currently supported by expectations of continued monetary policy tightening by the Bank of England, contrasting with the cautious approach of the FED, as it assesses the impact of previous rate hikes. Additionally, the UK economy has outperformed earlier pessimistic forecasts, further bolstering confidence in the Pound.
The euro may attempt to recover from recent losses against some currency pairs due to the European Central Bank’s recent hawkish interest rate hike, oversold market conditions, and underwhelming macro data.
The European Central Bank raised interest rates by 25 basis points last week, reaching the highest level in 22 years, signalling its intention to continue raising rates in the coming months. Earlier indications of a potential pause in tightening measures have been replaced by ECB President Christine Lagarde’s recent statement that there is still progress to be made. This outlook supports the euro, although it has weakened against the pound in line with previous forecasts.
In summary, the Pound is poised for further gains as markets anticipate a rate hike by the Bank of England, while the euro could see a potential rebound supported by the ECB’s hawkish stance and oversold conditions, albeit with limited gains due to existing long EUR positions.
Frequently Asked Questions: Selling Property Abroad
When is the best time to sell my overseas property?
Timing depends on three key variables — local market conditions, currency strength, and your personal tax calendar. For UK taxpayers, completing a sale before or after 5 April can move the gain into a different tax year, which can materially change your CGT exposure. Lucid typically recommends planning an exit 6–12 months ahead to align these factors strategically.
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Will I pay Capital Gains Tax in both countries?
In most cases, yes — but double-tax treaties prevent paying twice on the same gain.You’ll normally pay local CGT (for example, Plusvalía in Spain or Imposto Municipal in Portugal) and then report the gain in your UK Self Assessment. Under treaty provisions, tax paid abroad is credited against your UK liability up to the UK rate.
How do exchange rates affect the value I receive?
All gains are calculated in sterling, so movements between exchange and completion can add or erase thousands of pounds. If the pound strengthens after you agree a sale, your proceeds convert to fewer pounds. Lucid helps clients mitigate this using forward contracts and phased transfers — locking in rates ahead of completion.
What are the tax deadlines for reporting the sale?
Local deadlines vary by country, but UK residents selling overseas property typically declare the gain in their next Self Assessment by 31 January after the tax year. For UK property disposals, you must report and pay within 60 days of completion.Always confirm timing across both jurisdictions to avoid penalties.
Can I reinvest the proceeds to defer tax?
In some cases, yes — particularly where reinvestment qualifies for rollover or holdover reliefs (subject to UK rules).Outside the UK, “like-for-like” reinvestment schemes exist in some EU countries but rarely reduce UK liability. Timing and jurisdictional nuances make professional structuring essential.
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