After beginning the week well all eyes are likely to be on the Pound this morning, as at 9.30 am there will be a key data release in the form of UK Inflation data.
For much of last year and especially since the Brexit vote the Pound’s value has been driven by sentiment and Brexit related news, but recently economic data has begun to have more of an impact on the Pounds value as investors closely monitor how the UK economy is performing in these uncertain times.
A key reading for the UK at present is Inflation data, as it’s likely to determine monetary policy implemented by the Bank of England moving forward. Inflation is rising around the world due to the recovering oil price which is pushing up fuel prices, and the UK economy is faced with the added pressure of a weakened currency which is likely to swell inflation even further.
The Bank of England (BoE) is targeting an Inflation rate of 2% with today’s figure expecting to show 1.9% which is an increase on the previous figure of 1.6%. I’m expecting a higher reading than 1.9% to result in Sterling strength as it’s likely to increase the chances of an interest rate hike from the BoE.
The core CPI figure is also likely to be important as it will show the rate of inflation in the UK excluding fuel costs which may offer a better indication of the UK’s current inflation rate.
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