![]() Investors are closely watching these numbers as they could influence the Bank of England’s future interest rate decisions. ![]() The pound remained stable against the dollar and the euro while rebounding against the Swiss franc, ahead of crucial UK inflation and employment data set for release this week. This feeds into the broader financial environment, where the Goldman Sachs UK financial conditions index indicates the tightest conditions since June 2009. The BoE is poised to raise interest rates to over 6% next year, offering the pound a rate and bond yield advantage.Īlan Ruskin, a strategist at Deutsche Bank, puts it succinctly: We didn’t get sterling weakness in the past, so we shouldn’t expect it now with rates going up. Some economists argue that the currency’s strength is a byproduct of the Bank of England’s tight monetary policy aimed at combating inflation. Consumer prices in Britain were rising at an annual rate of 8.7% (April & May 2023), noticeably higher than its G7 peers.
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