Sterling has bounded into August close to its highest rate against the euro since April and against the US dollar since late June.
The Bank of England (BoE) Monetary Policy Committee (MPC) will be meeting on Thursday to set a new interest rate – or, less likely, to stick with the current 1.25% – so we could well see some market movement around there.
In UK politics, Tory leadership contender Liz Truss appears to have opened up a clear lead on Rishi Sunak, with high profile former opponents Penny Mordaunt and Tom Tugendhat coming out in support of her.
In the business news yesterday, PMI data from East Asia was disappointing, with Japan’s at a 10-month low, South Korea’s down to 49.8 (anything below 50 is a contraction) and China’s manufacturing PMI at 50.4 against an expectation of 52.
Europe did not fare so much better, with a dismal July extending into an anguished August. German retail sales were well below expectations at -8.8% year-on-year, their fastest contraction since records began. French, Italian and German manufacturing PMI was all below 50, while the UK’s was 52.1.
Apart from the BoE decision, it’s a relatively quiet week for data in the UK, but this morning we’ve heard from the Nationwide Building Society that UK house prices rose by just 0.1% in July to a lower-than-expected 11% year on year. On the other hand, data from a leading property portal shows that demand for homes is still at 25% above the five year average.
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