After a sharp rise at the beginning of this week, the pound weakened slightly yesterday and is trading around the same levels against the euro and the dollar this morning. As well as the prospect of an early interest rate hike, the markets are focussing on the energy crisis and Brexit issues.
Later today, the EU is expected to put forward proposals to reduce the checks on British goods at the Northern Ireland border. This comes after the UK said that the current rules are too restrictive and goods should be able to circulate more freely. Negotiations over this are likely to take place over the next few weeks.
US inflation data is due to be released later today, with core inflation expected to stay at 4% in September. The dollar has weakened slightly ahead of this and could be impacted if the figure falls short of or exceeds expectations.
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