020 7898 0500Oh Icarus, fly not too close to the sun. Sterling started the day by soaring against a basket of currencies and made some significant gains against the dollar. The move came following reports that the UK and EU had agreed a deal on Brexit. However, concerns over the fact that trade talks will not begin until February 2018 at the earliest took the wind out of sterling’s sails and it weakened sharply. A situation we will not be taking our eyes off anytime soon.
Friday also saw the release of the balance of trade figures which came in way above expectations. Although the deficit increased to £1.41 billion in October, economists had predicted it would widen to £3 billion so the news was strangely positive. Industrial production increased 3.6% year-on-year in October, although it stayed the same on a monthly basis (against an expectation of a 0.2% increase).
This week BoE meet to announce their interest rate and quantitative easing programme decision, although both are widely expected to stay the same. Tomorrow we have the inflation rate which is forecast to increase to 3.2% from 3%. Then on Wednesday we have the unemployment rate for October which is expected to stay at 4.3%.
