Sterling ended last week slightly down against most of its major partners but is holding close to its recent highs against both the US dollar and the euro. Last week’s UK growth figures showed an expansion of 0.8% which was as expected – significantly better than the US’s surprise figures showing a 2.9% contraction. The real surprise of last week in the UK was the back tracking of Mark Carney, the Governor of the Bank of England, who was less certain as to when UK interest rates would be increased than he had been the previous week which had been the cause of sterling sudden surge. Therefore there is an increased level of uncertainty as to the robustness of sterling’s recent strength and what will happen if the doubts of increasing UK interest rates begins to spread.
This week’s activity begins tomorrow, with the Purchasing Managers Index (PMI) from the manufacturing sector to kick things off. Wednesday continues the trend with the construction variety of this, before the trio is completed on Thursday with the services sector, the UK’s largest contributor. These pieces of influential data will be closely monitored as they will give an insight into how the UK economy is performing and the likelihood of increased interest rates rather sooner than later. They will be followed by the mildly important house price index, which closes out the week on Friday.