A struggling pound faced lower rates earlier this week, as the exchange rate took a battering following Brexit uncertainty.
With divisions in the government and accusations of being ill-prepared deal negotiations, the pound fell as low as £1.127.
It has since recovered thanks to the Bank of England’s positive meeting dubbed ‘Super Thursday’.
The BoE met yesterday to discuss the UK interest rates and whether they should be increased.
They were upped in November 2017, for the first time in over a decade to 0.5 per cent.
This was increased in a bid to tackle rising inflation rates at 3 per cent.
Whilst it was decided to keep interest rates as they are, which resulted in a stronger pound to euro exchange rate, there are suggestions that it could continue to rise this spring.
Economists predict that it could increase twice more in three years by 0.25 per cent, with one of them coming this May.
An increase in interest rates is good for savers, where the interest rates with benefit them.
However, mortgage holders will suffer the most, especially those who hold a variable mortgage which will see payments increase.
According to the BBC, approximately half of the 9.2 million mortgage-holding households are on one of these payment schemes, which could see additional costs of up to £300, analysed by research from Nationwide.
Laura Parsons, currency analyst at TorFX commented on the shift in the pound and what it could be affected by next.
She explained: “The GBP/EUR exchange rate jumped on Thursday as the pound broadly strengthened in response to the Bank of England’s latest interest rate decision.
“The BoE signalled that interest rates could rise in May, and the hawkish commentary sent GBP/EUR above €1.440.
“Sterling has since fallen back however, and may continue shedding yesterday’s gains if the UK’s industrial/manufacturing production and growth figures disappoint.”