Inflation has just been revealed to have stayed stable at 3.8% in September. The impact on exchange rates was to send the pound into an immediate tailspin, and it’s certainly one to watch.
The 3.8% remains well above the 2% Bank of England (BoE) inflation target, but even so there was plenty to cheer the BoE. Firstly, core inflation, with the more volatile food and fuel items removed, fell to 3.5% – its lowest since the spring. Secondly, it was those items most felt by lower income families, such as food and leisure, where prices fell most.
There is plenty more data coming over in the next 48 hours or so, including retail sales and the Purchasing Managers Index (PMI) on Friday. By the end of the week we will have a clearer picture of the economic situation facing the chancellor as she plans the budget, and the Bank of England monetary policy makers as they approach the next interest rate decision in two weeks.
Meanwhile, Andrew Bailey, governor of the BoE was speaking yesterday. While, he said, not wanting “to sound too foreboding,” he highlighted the worrying echoes of the sub-prime crisis that is gathering pace in America’s private credit markets.
In business news, the cyber-attack on Jaguar Land Rover (JLR) was revealed to have been the costliest in UK history, at around £1.9bn.
In transport, Eurostar has revealed plans to run double-decker trains from London through the Channel Tunnel by 2031, as it planned to increase passenger numbers from below 20 million annually to above 30 million.
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