The pound made some gains across the board this morning after inflation figures for November came in slightly better than expected at 10.5%, which was an improvement from 10.7% in November and certainly down from the peak of 11.1% in October.
The dip was put down to the fall in fuel costs, however inflation is being kept way above the 2% target mainly down to food prices which rose 16.8% in 2022 and are currently at the highest price since 1977.
Wages have grown at the fastest pace in more than 20 years after rising 6.4% YoY, despite the large increase they are still failing to keep up with. Some Economists are saying that a sharp fall in energy costs and a predicted slash in inflation means that the UK economy may not be as bad as initially feared.
Despite the positive news, one major setback at the moment is the number of industries that are striking, including train drivers, postal workers, NHS workers and teachers. So far it is estimated that the strikes have caused a £6bn hit to the economy, with more to follow should the government and worker unions not agree a plan.
The IMF have signaled an upgrade to the Global economic forecast after China drops its Coronavirus controls and US Inflation rates fall faster than expected. China's economy grew 3% in 2022, which was vastly down from the 8.1% in 2021, if China recovers quickly it could keep up demand for U.S. products and reduce pressure on supply chains as Americans face a potential recession this year.
The Eurozone has been boosted with optimism as the ZEW economic sentiment index for Germany, the region’s largest economy, swung back to 16.9 in January, its highest in 11 months, from -23.3 in December. The boost came as energy prices have improved which has given the Germans heavily energy reliant factories a more positive outlook
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