A positive end to the week for sterling saw it hold on to its recent gains, with investors still in a positive mood following the Bank of England (BoE)’s quarterly inflation report.
An important start to the week sees the latest inflation figure from the UK released on Tuesday. With the BoE last week saying that we could see inflation fall into negative territory, a fall in the inflation rate is expected. Additionally, if we do still see moderate inflation, markets may react favourably.
This week also sees the release of minutes from the latest meeting of the BoE monetary policy committee on Wednesday. These will be assessed for any hints as to when they expect to raise interest rates, although it is expected that all nine members voted to keep rates on hold. Alongside this, we will see average earnings for the past three months released, which are expected to show continued strong growth of 1.7%. A relatively quiet end to the week will round up with retail sales data for January from the UK which are expected to show a fall from December but strong growth for the last year.