With inflation surprising markets, creeping above 10% to 10.4% yesterday, some analysts say this now complicates the Bank of England’s interest rate decision which is set to take place this afternoon.
As well as inflation, markets saw the latest producer price indexes for input and output on Wednesday. Both monthly and yearly PPI output fell below market expectations to -0.3% and 12.1% respectively, while yearly input rose to 12.7%. Month-over-month input however, fell 0.1% in line with estimates.
Also on Wednesday, The Confederation of British Industry survey’s revealed that the UK’s total order book balance fell to -20 in March 2023, from -16 in the previous month. This marked the lowest reading since February 2021 and was below market expectations of -15.
Over in the US, mortgage rates fell to their lowest rate in four months yesterday. The US MBA 30 year mortgage rate data revealed that, the average contract interest rate for 30-year fixed-rate mortgages (with conforming loan balances of $726,200 or less) dropped by 23bps to 6.48%. This pointed to a second consecutive week of decline.
After lunch today, economists will see the latest new home sales figures for the US. The number is forecast to fall to 650,000 from 670,000 in the previous release. The data will be one to watch as it is one of the leading indicators of America’s economic health.
Eurozone consumer confidence will also be released today. An index above 0 indicates optimism, whereas anything below indicates pessimism surrounding past and future economic conditions. Markets are expecting a result of -18.
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