After an early morning drop yesterday, sterling powered upwards against the euro, US dollar and yen yesterday to end the day well above where it started the week.
Today it has stretched its lead as jobs data showed the lowest level of unemployment for 50 years.
Earnings are also rising fast, with earnings including bonuses hitting 7% against a market expectation of 5.4%. However, regular pay without bonuses fell by 1.2% when inflation is taken into account.
Speaking before the Treasury select committee yesterday, governor of the Bank of England Andrew Bailey said yesterday that the Bank is facing the biggest test of its credibility at controlling inflation in the 25 years that it has been independent. He claimed that it was more to do with external factors and that of the 10% rise in inflation that the country is likely to hit, “there is nothing we can do about 80 per cent of it,” he said.
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