Sterling rallied on Tuesday as annualised inflation showed a higher-than-expected jump throughout the previous month – the first month after the announcement of the Referendum result. After a tough week or so which saw sterling fall to multi-year lows against the euro, the British currency was able to post its first day of gains for over a week. Inflation of 0.6%, although a positive for the currency markets, does point to underlying issues with the economy post-Referendum as UK companies are forced to accommodate higher import prices. Sterling also posted significant gains against the US dollar on Tuesday, erasing recent losses, and moving away from recent 1985 lows.
Today sees the release of a wealth of labour data from the UK. Average earnings are forecast to have shown another strong increase over the previous quarter, whilst unemployment claims are set to rise to the highest level in four months.
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