020 7898 0500Sterling moved significantly lower against the single currency yesterday, hitting an eight-month low, as political uncertainty continued to engulf the nation. The move was mainly driven by the euro but sterling also dropped against the US dollar despite the US having its own issues.
In addition to the persisting political uncertainty, we had two Bank of England Monetary Policy Committee members speaking at separate events. BoE Chief Economist Haldane has already laid out his stall with regards to monetary policy (he’s in favour of hiking rates soon). However, a catalyst for the sterling drop was that Broadbent avoided the topic.
Today is pretty busy in terms of economic data as the latest employment figures are due to be released. The main focus will be on average earnings. The markets will want to see if the figure has dropped further from the 2.1% reported last month.
This number will be monitored alongside inflation, which will be released next week, because this could indicate that consumer budgets are being squeezed further. This, in turn, will have a big influence on interest rates.
