A positive performance on Monday saw sterling claw back some of the losses it had suffered last week. This followed the early morning announcement ending the stand-off between Greece and her creditor as the Greek government and Eurozone ministers finally came to an agreement over a new bailout financial aid package. With little economic data of note released from the UK on Monday, markets may have expected sterling to suffer against the euro – but the British currency found itself gaining ground against the euro as investors waited to see whether the Greek government face difficulty passing the required reforms through its parliament. Sterling also saw some recovery against the US dollar.
Today we see the release of inflation data from the UK, which is forecast to show a third straight month of modest growth. Following this, we will also have the Bank of England (BoE)’s latest inflation report hearings where they will give their thoughts on inflation and the economic outlook. Finally, the BoE Governor will speak in the afternoon on the Financial Stability Report, and could well drop some hints regarding future monetary policy.