The pound maintained its strength against the euro and the dollar yesterday, mainly due to positive employment data and comments last week from Governor of the Bank of England, Andrew Bailey. He revealed that half of the Monetary Policy Committee were in favour of raising interest rates early to combat rising inflation.
Inflation rate figures were released this morning, showing that annual inflation rate in the UK jumped to 3.2% in August of 2021, the highest since March 2012. The main upward pressure came from prices of recreation and culture, transport, housing and utilities, food and restaurants and hotels. This is the largest ever increase recorded, shooting up by 0.7% from July to August. The Office of National Statistics stressed that this large jump is partly due to discounted prices last year during the government’s Eat Out to Help Out scheme.
The markets will now be looking ahead to UK retail sales figures, which are due to be released on Friday.
