Sterling has strengthened across the board at the start of the week, following what the markets apparently see as reassuring news – centrists taking more power in the heart of government – and a strong labour market continuing, with earnings outpacing inflation.
However, in a report compiled by S&P Global, despite easing inflation, UK business confidence dropped to 37 in October 2023, signalling the softest projections for business activity in 12 months. Non-staff costs and output prices are expected to rise at the slowest rate since February 2021 and strong hiring forecasts keep wage expectations near record levels.
Tomorrow will be the UK’s inflation data, and there is also high level data from the USA and EU, so watch out for sharp market movements.
GBP/EUR: the past year
