After the excitement of the General Election in the previous week, last week was a more timid affair and sterling was on the whole steady apart from its continued upward trend against the US dollar where it gained another couple of cents.
This week sees some important data releases from the UK, as excitement from the parliamentary elections settles, and the markets focus back on fundamental economic data from the UK. Tuesday sees release of the latest inflation figure from the UK, with a third straight month of 0% inflation forecast. Core inflation (excluding fluctuating food and energy prices) is still forecast to show a healthy 1% increase, and any movement above this could see sterling strengthen.
The main event of the week will be the release of minutes from the latest Bank of England (BoE) policy meeting on Wednesday. This will give insight into policy makers’ views on interest rates. Retail sales data on Thursday should show a pick-up throughout March. Finally, Friday will see BoE Governor Mark Carney speaking on two occasions. Investors will be listening for further cues on the BoE’s stance on interest rates.