Sterling opened up yesterday morning at ten-month lows against the US Dollar and three-month lows against the euro. The Scottish Independence referendum is still taking the spotlight, with Sterling in no shape to recover the losses it suffered over the past week. YouGov and various other polls show the ‘Yes’ campaign to currently be in the lead but only by a small margin. The UK Government has since had to act on the back of these polls, a contrast to their laid back approach when the ‘No’ campaign was comfortably in the lead.
We did, however, see small resistance against sterling weakness yesterday afternoon, on the back of Bank of England (BoE) Governor Mark Carney’s words that the BoE may increase the benchmark interest rate from a record low in Spring 2015. This should be the point at which inflation has reached the BoE’s 2% target and 1.2 million jobs created. In terms of data out for yesterday, we saw manufacturing production remain the same as in the previous month, at an expected figure of 0.3%. Today we look forward to the UK Inflation Report Hearings.