With Bank of England (BoE) policymakers unanimous in their view of an eventual rise in UK interest rates, sterling jumped across the board to hit the highest levels in a month against both the euro and US dollar. There was little fundamental economic data to be released on Wednesday, meaning investors were looking forward to minutes from the latest meeting of the BoE monetary policy committee with particular fervour. Despite no change in the voting spread, policymakers struck a confident tone, with two members suggesting that they may soon vote for a rate rise. This news comes despite the record low inflation of 0% in the UK, a situation which the BoE sees picking up faster than expected as energy prices begin to rise. Coupled with existing fears over the Greek debt situation, and the recent disappointing data from the US heightening the possibility of the Federal Reserve postponing an American interest rate rise, sterling prospered throughout the day.
Today sees a number of data releases, with UK retail sales data for the month of March taking centre stage. Following a strong recovering in February, investors will be hoping for continued momentum in this powerful indicator of consumer confidence.