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GBP: Moscow’s response to Johnson expected soon

By Kiran Najran March 19th, 2018

On Friday, Boris Johnson said it is ‘overwhelmingly likely’ that the Russian President, Vladimir Putin ordered the nerve agent attack on former double agent Sergei Skripal. What evidence he has for this is not currently clear, but Putin’s spokesman, Dmitry Peskov, said ‘Any reference or mention of our president in this regard is a shocking and unforgivable breach of diplomatic rules of decent behaviour.’ He added that the accusations ‘not only violate international law but also run against common sense.’ It is a worrying situation and one wonders how it will resolve itself.

It was a relatively quiet week for economic data in the UK last week, but the pound held its own against the dollar and strengthened against the euro throughout the week. It will be interesting to see what happens to sterling this week given the fact that we have a much busier week to come.

On Tuesday we will see the UK inflation rate, as well as the retail price index for February. On Wednesday we the unemployment rate for January is released and on Thursday, the Bank of England will announce its interest rate and quantitative easing decision. Both are expected to remain unchanged, but Carney might give further indication of future monetary policy and could possibly hint at a rate hike as early as May. If that happens, we could see some sterling strength.

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