The pound strengthened against the euro and the dollar over the course of yesterday as global risk sentiment improved.
This improved mood is partly down to Russian President Vladimir Putin promising to help boost gas supplies in Europe. Sterling is also being supported by the increased prospect of an interest rate hike in the UK after the Bank of England’s chief economist said the “inflation spike is proving greater than expected” in terms of both “magnitude and duration”.
Labour productivity for Q2 rose by 0.1%, beating estimates of a 0.5% drop. The biggest gains were seen in accommodation and food services, as well as government services and retail trade.
Markets will now be waiting for the Bank of England’s Quarterly Bulletin and the US Non-Farms Payrolls report, both of which are due around lunchtime and could threaten sterling’s strength.
