Sterling was unable to make any headway against the dollar during the European session on Monday, but it was able to strengthen against the Euro for the sixth successive session as the single currency dipped to lows around 0.8460.
According to data from Visa, UK consumer spending slowed to a five-month low of 0.4% in January from 2.5% in December, maintaining expectations that underlying consumer spending will slow during 2017.
The latest UK consumer inflation data will be watched closely on Tuesday and a lower than expected reading would dampen expectations surrounding the need for higher interest rates while any move in the headline rate to 2.0% or higher would increase speculation that the Bank of England could be pushed towards an earlier than expected tightening.
Sterling was able to hold above the 1.2500 level against the dollar on Tuesday with a firm underlying tone
Related Insights
Morning Brief – European Interest Rates
Humphrey Percy
Wed 6 Dec 2023
European Interest Rates More momentum on rate cuts in the Eurozone as expectations grew for cuts starting in March and totalling 140bps in 2024. Equally in the UK cuts of 130bps starting in June are being pencilled in to market calendars. What this means is that GBP/EUR is looking more than especially good value at […]
Morning Brief – UK
Humphrey Percy
Mon 4 Dec 2023
UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]
Morning Brief – UK Labour market
Humphrey Percy
Wed 29 Nov 2023
UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]
