020 7898 0500There are no major economic data releases from the eurozone this week so attention has understandably turned to the UK and US. The euro slid against sterling following the release of UK inflation figures which increased expectations of a faster-than-previously-expected interest rate hike.
At 2.9%, UK inflation is almost a whole percentage point over the BoE’s 2% target and it really does beg the question how high this figure needs to creep before Governor Carney and his colleagues feel obliged to do something about it.
Given that the meeting and decision doesn’t take place until tomorrow, it is entirely possible that we could see some further weakening of the euro against the pound throughout the course of the day. It is Thursday that will provide a fuller picture of the near future.
