Sterling hit another 2023 high against the euro yesterday, ending the day 1.75% up on the month and 0.5% up on last Friday. This was in marked contrast to its losses against the US dollar which amounted to around 1% on the week.
So far this morning there has been little movement. The Gfk Consumer Confidence reading for the UK came in at -27 overnight. This is the fourth improvement in the mood of householders about their personal finances for the year ahead in consecutive months, and the best figure for 15 months.
World leaders are gathering in Japan for the G7 meeting, but President Biden has not so far joined them as he grapples with the debt ceiling issue. His government requires opposition Republican support to allow it to borrow more money and pay its bills. There has been some doubt as to whether this will happen, with potentially catastrophic results. However, with “cautious optimism” being reported on a deal, the dollar has strengthened significantly.
In the UK, according to a senior economist at the Office for Budget Responsibility, the era of “massive house price rises” is coming to an end. David Miles said that working from home that offers people more choice of where they live, which combined with interest rate rises means the next 40 years would be very different to the past 40.
In Europe, EU Commission president Ursula von der Leyen has called for “guardrails” to be placed around AI technology, even as BT announces 55,000 job losses with up to a fifth to be replaced with AI. In the meantime, the rail unions have announced more strikes, with three strikes over four days over the school half term.
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