Sterling pushed close to a May high against the euro yesterday, following the release of minutes from the latest policy meeting of the Bank of England (BoE). The minutes showed a unanimous agreement to keep interest rates on hold – but did indicate that two members were finely balanced between keeping interest rates on hold, and pushing for a rate hike. There were also signs that the BoE expect the current economic slack to be fully utilised by the end of the year – which would increase the pressure to raise interest rates in early 2016.
In addition to the release of these minutes, further negative news from the Eurozone surrounding the Greek debt situation ensured that sterling continued to move closer to its recent April highs against the multi-nation currency.
A quieter, but by no means insignificant day lies ahead for sterling, as we await the release of retail sales data this morning. Following a surprisingly poor reading in March, investors will be hoping for a strong figure for April which would lend further support to sterling.