Inflation Data Key as Pressure continues to mount on GBP

By Matthew Boyle

The Pound remains under pressure as GDP figures this morning showed slower growth than expected. Despite GDP rising 0.2% this was less than the expected 0.3% and as a result, sterling remained on the back foot.

This week, market focus will be on inflation data which is directly linked to interest rate decisions. Whilst UK inflation has continued to rise, and with it rumours of further interest rate hikes, last week’s energy bill introduced by new UK Prime minister Liz Truss is expected to dramatically cut inflation – something which might improve the outlook for the Pound.

To add pressure to falling GBP rates, the EUR has gained strength as news emerged that Ukraine have taken a significant military advantage over Russia in a conflict that has had a significant impact on the strength of the single currency. Any sign that Russia and its grip over gas prices may be failing of course only helps the Euro gain.

Whilst this battle continues, Tuesday will be critical as US inflation data is released. Will the Fed’s hikes have slowed inflation enough to be reflected in their aggressive programme of interest rate hikes?

With the Greenback leading the market and inflation the key issue no doubt this is the one to watch this week.

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Data This Week


06.00     GBP       GDP & Manufacturing and Industrial Production

12.00     EUR        ECB Data


06.00     GBP       Unemployment Data

09.00     EUR        German Inflation Data

12.30     USD       US inflation Data


06.00     GBP       Inflation Data

22.45     NZD       GDP


01.30     AUD       Employment Data

12.30     USD        Retail Sales


02.00     CNY        Retail Sales

06.00     GBP        Retail Sales

14.00     USD        Consumer Sentiment