By Matthew Boyle
This week has seen the Pound recover surprisingly despite ongoing political uncertainty as Andy Burnham prepares to challenge Kier Starmer for leadership of the Labour party and UK government.
An announcement from Burnham late on Monday stating he would not alter fiscal borrowing rules for the UK government, which ensure UK debt sustainability, allowed Sterling to recover over the last two days’ trading.
This was despite data yesterday showing the UK unemployment rate rose to 5% in March from 4.9%. Analysts suggest this is largely because of conflict in the Middle East affecting the jobs markets as demand for workers weakened. Analysts suggest this rise in unemployment combined with lower wage growth in the UK affords the Bank of England some more time to decide upon whether Interest rates should be increased to combat rising inflation.
However, UK inflation data released this morning showed a surprising drop to 2.8% in the last 12 months, down from a previous 3.3% and an expected result of 3%. As a result GBP buying rates have dipped, but only marginally as the UK energy price cap is due to rise. This combined with ongoing conflict in the Middle East suggests the respite from inflation increases may well be short-lived.
Tomorrow will be an interesting watch as we see the UK, Europe and the US go head-to-head with Production, Manufacturing and Retail data released by each. Any surprise results here could well see rates move for GBP, EUR, and USD.
The week rounds off with UK retail sales on Friday morning, and the swearing in of the new Federal Reserve Chair Kevin Warsh, who succeeds Jerome Powell as 17th chair of the Fed.
Should you have an upcoming transfer to make, speak to you Currency Consultant today for some friendly and professional guidance on how to avoid the risk of rates moving and making your transfer more expensive – we can help make your money go further.
Wednesday
07.00 GBP Inflation, Production and Retail data
08.00 EUR Non-monetary policy ECB meeting
19.00 USD FOMC Minutes
Thursday
08.30 EUR German Production, Manufacturing and Retail data
09.00 EUR Eurozone Production, Manufacturing and Retail data
09.30 GBP UK Production, Manufacturing and Retail data
14.25 USD US Production, Manufacturing and Retail data
Friday
07.00 GBP UK Retail Sales
N/A USD Fed Chair Walsh swearing in ceremony