The pound has strengthened sharply against the euro this morning, trading around a two-month high. Against the dollar, sterling is also stronger.
The euro has been suffering following fresh reports that Russia will restrict a key gas pipeline to the eurozone at a crucial period ahead of winter. Gazprom, the Russian energy giant, warned that it will cut flows through the Nord Stream 1 pipeline to just 20% capacity, blaming technical issues. The EU has condemned Russia’s “continuous use of energy supplies as a weapon”.
Today, the big event and market mover will be the US Federal Reserve’s latest interest rate decision. A hike of 75-basis points is widely expected, so any surprises could impact the major currencies.
There is more disruption to UK travel today with the latest round of national train strikes. Around 40,000 RMT union members will walk out over pay, jobs and terms.
In the political world, Tory finalist Rishi Sunak has vowed to scrap the 5% VAT rate on household energy bills if prices continue to rise. Sunak has so far not promised any tax cuts. Rival Liz Truss has called this a “screeching U-turn”.
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