The pound lost 0.25% and 0.80% yesterday against the euro and US dollar, respectively, as economic data boosted the greenback.
Huw Pill, chief economist at the Bank of England spoke about UK interest rates in an online Q&A with the public. Pill said, interest rates would have to stay at or near their current level “into the middle of next year.”
The current UK interest rate is 5.25% which remains considerably higher than the Bank’s 2.0% target.
Yields on short-term British government debt fell to the lowest since mid-June following Pill’s comments.
The US trade deficit widened to $61.5 billion in September, higher than $58.7 bn in August and market forecasts of $59.9 bn.
Eurozone producer prices fell by 12.4% in September, slightly missing market forecasts of a 12.5% decrease. This marked the steepest decline in producer prices on record.
Yesterday, the British government confirmed its plans to grant new North Sea oil and gas licences every year at the opening of parliament which will allow companies to bid for new licences to drill fossil fuels. Some politicians have argued that this undermines efforts to reach net zero.
Following the announcement, crude oil futures fell more than 2.0% to below $79 per barrel, the lowest rate since August 25th.
The German consumer price inflation was confirmed at 3.8% in October, easing from September’s 4.5% and matching market forecasts.
Jerome Powell, chair of the US Federal Reserve is due to speak at the Central Bank of Ireland Financial System Conference this afternoon. While there is no clear agenda, economists will be listening out should Powell tip his hand.
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