Sterling saw a short dip this morning following the headline inflation out of the UK rose to 2.6% year on year in November, higher than the 2.3% seen in October, this indicates inflation is more likely to reach 3% than the Bank of England’s target of 2%.
Despite the numbers, it met the markets expectations, resulting in the fairly muted response upon release although this does double down on the assumption the BoE will choose to hold the current interest rates and continue to take a more cautious approach.
If expectations are met and no cut takes place, markets will then look at the vote split between the MPC members and the speech from Governor Andrew Bailey, on any signals on future cuts in their planned cycle to combat inflation, this is due to take place tomorrow.
The day has come for the interest rate decision from the Federal Reserve, which again markets have priced in a 25 basis point cut despite the mixed data out of the US. The focus will turn to the statement that follows and look for signals on their plans heading into the New Year, along with taking Trumps proposed policies into account.
Oakleigh Exchange Partners.