Sterling falls following interest rate hike: Adaptive Insights comments
The pound took a tumble on Thursday (2nd November 2017) as the Bank of England announced that it will double interest rates for the first time in a decade. When the decision was announced to raise interest rates by 0.25 percent, late afternoon trading found the sterling was down around 1.6 percent against the euro and around 1.2 percent lower against the dollar. This news comes after the pound leapt in September to its highest level since the Brexit vote. Rob Douglas, VP of United Kingdom and Ireland at Adaptive Insights, advises that fluctuations in the market call for companies to review their financial planning processes:
“For many businesses across the UK, the rise in interest rates and subsequent fall of the pound will require action,” said Douglas. “Companies are operating in the midst of a volatile market, where the sterling went from being at its strongest since the Brexit vote, to taking an immediate tumble after the rise in interest rates was announced. This market instability can upend budgeting and forecasting, making it difficult for finance and management teams to devise an accurate financial plan and make business-critical decisions.
“Economic and market volatility require businesses to be as agile and adaptable as possible to ensure their financial planning models reflect changing assumptions and conditions. To do this, companies must plan in real-time, with current data from across the organisation, so that they can mitigate potentially damaging consequences, such as a negative impact on profit margins. What’s more, businesses should prepare to be more responsive by running ‘what if’ scenarios in advance that will, for example, reveal the impact the rise in interest rates could have on their business, allowing them to make better, faster decisions.
“Ultimately, it is the companies with sound financial planning processes in place that will have a better chance at success when volatility strikes,” concluded Douglas.
This was posted in Bdaily's Members' News section by Adaptive Insights .
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