The pound is slightly stronger against the euro and the dollar this morning, trading above significant levels against both. A combination of speculation that negative interest rates won’t be used by the Bank of England and the vaccine rollout across the UK is thought to be supporting sterling.
In a speech yesterday, Bank of England official, Antony Haldane said that the government could afford to end the furlough scheme before the UK’s economic recovery is complete. However, business leaders are calling on the Treasury to extend the scheme before its current deadline at the end of April.
Data released this morning reveals that inflation rate in the UK reached 0.6% in December from 0.3% in November and slightly above market forecasts of 0.5%, as some coronavirus restrictions were eased after the second lockdown. Retail Price Inflation increased to 1.2% in December from 0.9% in November.
Governor of the Bank of England, Andrew Bailey, will speak later today. Any further clarity on the Bank’s decision for interest rate could cause the pound to move.
