020 7898 0500Sterling fell across the board as Britain’s inflation numbers hit the wires. Inflation fell and posted its first decline since October 2016 as the headline figure fell from 2.9% to 2.6%. What’s more, the core inflation reading (which excludes volatile energy, food, alcohol and tobacco) also showed a decline.
The net effect was sterling weakness as the market lowered its expectation of an imminent rate hike. If inflation had come out as expected (or greater) there would be continued pressure on members of the BoE Monetary Policy Committee to take action against escalating inflation.
The next few weeks and months represent a difficult tightrope to walk, where controlling inflation whilst keeping monetary policy in a place so growth can continue are chief considerations.
It is a quiet day with regard to economic data but newswires surrounding Brexit and other political news could trigger some currency movement.
