Having strengthened significantly on Friday, Monday was “a day of rest” for sterling as the markets took stock. There were no major data releases from the UK.
Today we have much more information to digest, with a number of indicators released on UK inflation that will be scrutinised by market participants globally. The data becomes even more relevant to the pounds performance following Mark Carney’s recent rhetoric that hinted at higher interest rates. If there is a positive surprise in the inflation data today, this would support Carney’s view and may see further strength in the pound. Finally there is some further data to be released on UK house prices, a key component to the UK growth, and this will be looked at in conjunction with the inflation data.