A forgettable end to last week for sterling saw it lose ground against the euro for the third successive day while falling close to pre-election levels against the US dollar. There was a dearth of UK economic data releases to boost sterling.
This week is likely to be very different as we have a constant flow of UK economic data releases and the all-important interest rate decision from the Bank of England (BoE).
The May purchasing managers’ indices (PMI) from the manufacturing, construction and services industries are released this week. These have all continued to show strong positive growth – with the services sector making up 70% of the UK economy, investors will be particularly interested in this figure on Wednesday. The outcome of the General Election is also expected to have had a positive effect.
Aside from this, the BoE vote on interest rates will be the dominating releases. With two members of the monetary policy committee recently demonstrating a desire to increase rates, we may see increased movements in the run-up to this vote on Thursday.