Rishi Sunak believes that Brexit is not to blame for the UK’s economic difficulties, and despite evidence that leaving the EU has resulted in a reduction in trade, the finger is pointed at Covid and Russia’s invasion of Ukraine.
Yesterday saw Q3 unemployment figures rise for the fourth consecutive month to 3.6%, a sign that employers are holding back on hiring plans due to the rising costs and weaker demand. The negative news may have a positive spin for some households as the Bank of England are worried about a ‘wage-price' spiral, which would push inflation higher, therefore causing the need to raise interest rates, so the slowdown in hiring will lead to less churn in the job market, which will ease pressure on businesses having to pay more to retain staff.
UK inflation figures came in higher than expected today at 11.1% compared to the forecasted 10.7%. Inflation. The data which points towards a potential need to hike rates further boosted the pound slightly from 1.1850 to around 1.19. The pound briefly spiked yesterday to 1.2030. All eyes will now be fixed on the Chancellor's economic plan tomorrow.
This afternoon will see the data release for US retail sales which are expected to show 1% growth for October, which will be up from the 0% in September.
We will also see the BOE monetary policy hearings this afternoon at 14.15 as well ECB President Lagarde speaking at 5 pm, so volatility can be expected.
GBPUSD resides at 1.1907
GBPEUR resides at 1.1426
EURUSD resides at 1.0420