Sterling saw out last week with some positive movements, despite its data missing target. The monthly manufacturing production figure from the UK came in behind expectation, but this negativity was overridden by longer-term optimism from an industry group that said the speed of economic growth in the country will be greater than previously thought. They said this was down to the fact that consumer spending will be boosted by higher house prices. This, alongside weaker-than-expected US payroll data, allowed sterling to make gains against the majority of its major partners; this included making the biggest rise in nearly two weeks against the US dollar.
This week starts quietly with nothing of note until Wednesday, when the UK inflation report is due. This is likely to be a significant piece of information, as it should give guidance and clues as to the Bank of England (BoE)’s plan for interest rate hikes. As this is the most influential UK data release this week, the anticipation before the release and reaction after could govern sterling markets.
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