This morning sterling is still weak against both the euro and the dollar.
The BoE’s interest rate decision last week caused frenzy among market watchers, as the 50 basis-point increase carried the rate to a steep 1.75% . This was the highest rate hike Britain has seen in nearly 30 years.
The pound regained some strength by the end of the week but market watchers may expect some volatility ahead for sterling. This follows BoE governor Andrew Bailey’s warning of up to a year-long recession and second rate-hike on the horizon for Britain later this year.
Tory candidate Liz Truss however, disagrees with the prospect of a recession . Truss does accept “the inevitability of a recession” and vowed to use a September emergency budget to “immediately” cut taxes. Sunak refuted this as “starry-eyed boosterism”, compared to his “clear-eyed realism” and argued that Truss’ tax proposals “are not going to help” people who are going to “need help” such as “pensioners” or “those on low incomes” .
GDP will be released on Friday. It is currently predicted to decrease by 1.3%
