The pound continues to weaken against the euro following yesterday’s inflation data. Inflation is now more than 5 times higher than the BoE’s target.
Against the dollar, sterling has also weakened.
In UK politics, both Tory leadership candidates have vowed to cut taxes. Liz Truss has pledged to scrap April’s National Insurance in efforts to help households and has also vowed to scrap a planned rise in corporation tax. Truss says high taxes are “choking off growth” in Britain’s economy.
Rishi Sunak has vowed to lower VAT on domestic energy bills from 5% to 0, as well as promising a reduction on income tax by 3p come late 2029. However, Sunak emphasized these tax cuts will only happen once Britain has “gripped inflation”.
The IFS said it was concerned by both candidates’ tax cut plans, due to the economy’s “deteriorating outlook”.
In the eurozone, inflation is predicted to hit 8.9% this morning.
In the US, data on existing home sales will be released today. In June, home sales plunged well under market forecasts to $5.12 million. Markets are predicting sales will decline further, to an even lower $4.8 million.
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