Last week was a very busy week for data releases, not just here but worldwide. This week will be much quieter with the key UK data being released on Wednesday. Firstly there will be the Bank of England inflation report which is likely to highlight that inflationary pressure is low and unemployment continues to outperform. The UK labour market data is expected to show a reduction in unemployment and slight wage growth still below the inflation rate.
So we can probably expect a quieter week for sterling movement when compared to last week which saw sterling hit fourteen month lows against the US dollar, This came on Friday after the UK trade deficit widened to £9.82 billion in September from £8.95 billion in August, whose figure was revised from a previously estimated deficit of £9.10 billion. Analysts had expected the trade deficit to widen to £9.40 billion. Against the euro sterling continues to trade in a fairly narrow range seemingly unable to get the “energy” to drive up through the 1.29 level. Events this week are unlikely to help develop the required “energy”.