Home » Currency Note » Currency Note » Squeeze eases as UK inflation falls to 2.4%

The good news continued yesterday as we learned the cost of living squeeze has eased. On Tuesday, figures released showed that average earnings excluding bonuses had risen by 3.1% in the three months to July. It was the fastest increase for almost ten years. Then, on Wednesday morning, the inflation rate for September was released and showed it had fallen to 2.4% from 2.7% the previous month, below expectations of 2.6%.

It essentially means that we are all likely to be a bit better off for the time being at least. It could also convince the Bank of England to delay hiking interest rates, which might explain why sterling weakened against the dollar. It didn’t perform all that well against the euro either, while the single currency made some losses against the greenback. The Office for National Statistics said that the fall in inflation came about because of cheaper food and drink, although energy prices did increase.

Eurozone inflation was released too and came in as expected at 2.1%. There was some good news in the form of construction output in August, which increased to 2.5% from a downwardly revised 2.2% the previous month. Analysts had expected a drop to 1.7%. In the US, we saw building permits, which dropped 0.6% in September from the previous month. The markets had expected a 2.1% rise, so the reading was rather disappointing.

The Federal Open Market Committee meeting minutes were released yesterday evening and showed that the further rate hikes are expected. Trump’s recent criticism of Fed policy has clearly had no influence yet. The central bank also expressed concern over trade wars and tax cuts. Some are predicting as many as three rate hikes in the next eight months, before a slowdown.

Today we have UK retail sales for September, as well as initial jobless claims from America up to the week ending 13 October. Employment has been exceptionally strong in the US for some time now and it will be interesting to see if another record low of claims can be reached.

There’s a lot coming up in the next few weeks, so do ensure your budget is fully protected. It’s simple to do and could save you thousands. A forward contract lets you lock in an exchange rate for up to 12 months, so you can disregard market movements. Call your Personal Trader on 020 7898 0541 to set one up today.

Find out how we can help you

Let us know a little more about your upcoming currency exchange needs. We aim to take the uncertainty away by providing guidance on which services suit your individual requirements. You can then rest, assured your money is not at the mercy of the currency markets.

Protect against risk

Avoid losing money and protect against currencies moving against you.

Dedicated trader

Dedicated currency trader working with you to get the best value for your money.

Secure and efficient transfers

Secure, quick and efficient transfers. Authorised by the FCA.

  • We handle your data with care and only ever as outlined in our Privacy Policy.

Keep up to date

Get regular, jargon-free currency market updates delivered directly to your inbox.

  • We handle your data with care and only ever as outlined in our Privacy Policy.

Refer a friend or business

Recommend our services to your friends, family or colleagues and earn great rewards.

You have Successfully Subscribed!