The Pound made great gains against the Euro, Dollar and Rand in the afternoon’s trading session following the Monetary Policy Committee’s split decision on raising interest rates.
The vote came in at 5-3 just after noon today to keep rates on hold at the record low 0.25%. Kristin Forbes surprisingly found support from two others to raise rates to 0.5%.
Markets were surprised and rightly so since this was the first time since 2011 that there has been 3 dissenters on the committee. Sterling reacted accordingly trading up aggressively against all major currencies, in particular recovering losses against the USD after yesterdays Fed announcement.
This announcement has acted as a smokescreen for the poor retail sales figures which came out in the morning session. Retail sales fell sharply last month pouring more uncertainty on the UK economy as we head into the Brexit negotiations.
Sterling No sooner had the financial press written that Sterling was on the skids due to the Chancellor being on the way out, than PM Starmer woke up to the need for some TLC for his beleaguered Chancellor and executed a handbrake turn to administer some gruesome bedside cheer to the apparently on life support […]
EU Inflation With the ECB annual symposium meeting in sunny Sintra, Portugal, inflation is very much on President Lagarde’s mind ; that is because it is showing signs of rising with the monthly inflation rate showing an increase of 0.3% and that presages a break above the target 2% rate just as she and her colleagues […]
Gold With Gold accounting for the second highest proportion of Central Bank reserves after the USD and the mood music shifting to it assuming a greater influence on future reserves management, it is worth looking at the numbers behind that. In the 1960s, Central Banks held the highest amount historically of 38,000 tons of gold. […]