The British economy fell by -0.3% in August as factories and consumer-facing businesses struggle according to ONS. The GDP surprisingly shrank as prices are rising at their fastest rate in 40 years, and outpacing growth in pay. The Bank of England has previously stated that it expected the British economy to fall into recession by the end of the year, and the latest announcements from the government and the subsequent emergency measures from the central bank are certainly pointing in that direction. The IMF has been very critical of the British government’s “mini-budget” and has warned that inflation in the UK will worsen as a result to reach 11.3% before the end of the year.
In the United States, Federal Reserve officials are also worried about the pace at which inflation grew and keeps growing. Minutes from Wednesday’s meeting show that they expect high-interest rates to remain in place until inflation is brought down to target levels at 2%. The Fed officials also recognised the toll that higher interest rates have taken on lower-income Americans in an economy that relies heavily on consumer debt to fuel consumption, casting more shadows on an American economy which may already be in recession, have seen a contraction of the economy in Q1 and Q2.
Late Wednesday evening, strikers at TotalEnergies firmly declined a management proposal to release dawn deliveries as a precondition for opening in the wake of wage negotiations. The conflict entered a new phase on Wednesday with the execution of the threat of requisitions by the government, as it ordered to reopen the floodgates. Six of the seven refineries in France were on strike on Wednesday with 30.8% of service stations lacking one or more fuels.
Cable rose by +1.26% yesterday. GBPUSD opened at 1.0964 and closed at 1.1101.
GBPEUR followed a similar trend as it also rose by +1.28%. The pair opened at 1.1303 and closed at 1.1438.
EURUSD saw less volatility as the pair opened at 0.9700 and closed at 0.9705.
