Currency Note Sterling

Sterling enjoys a good Tuesday, will it continue?

By Ricky Bean December 17th, 2014

A positive day for sterling saw it make gains against the majority of its trade partners, despite UK inflation of only 1% in November, representing the lowest inflation rate in 12 years. A positive start to the day saw only one of the eight banks and building societies fail the Bank of England (BoE)’s recent stress tests. BoE Governor Mark Carney noted that this showed UK banks could continue to serve the economy, even if the UK economy was suffering extreme conditions and economic turmoil.

Sterling gained over a cent throughout the day against the US dollar, although it struggled to hold ground against the euro as manufacturing growth throughout Germany and the wider Eurozone area beat expectations. With tumbling oil prices sending the costs of transport and food lower, UK inflation fell to 1% in November. However, with Carney assuring investors that low inflation would not affect monetary policy, sterling was largely unaffected by this development.

Another busy day lies ahead for sterling, with minutes from the latest meeting of the BoE’s Monetary Policy Committee released this morning. Investors will be looking for any change in the voting split from previous meetings, and for pointers towards future monetary policy. With the ever-volatile unemployment claims figure as well as average earnings data released this morning, it looks to be another interesting day for sterling.