Sterling lost around 0.5% against the euro but over 1% against the US dollar yesterday as global inflation raised its head again in a key week for interest rate-setters. Some of sterling’s losses have been clawed back this morning in early trading.
The cause of volatility was primarily the eurozone economy. Inflation hit 10.7%, its highest rate since the euro was created and well ahead of market forecasts of 10.2%. GDP data was also disappointing, with the smallest quarterly growth since pandemic restrictions eased.
In the UK, mortgage approvals fell in September in the biggest monthly fall since February 2021. We have heard this morning from the Nationwide that UK house prices fell by 0.9% last month, taking the annual rise to 7.2%, well below expectations.
Coming up this week, tomorrow is the US Federal Reserve’s interest rate decision, followed a day later by the Bank of England’s.
In business news, BP’s profits doubled, to $8.2bn in Q3.
A US court has dismissed criminal charges against a British currency trader who was convicted in the UK of Libor manipulation. Tom Hayes served half of an 11-year sentence in Britain but hopes to have that conviction overturned.
Battery producer Britishvolt has secured funding to stay in business and will now hope for extra government financing.
The UK’s migrant problem is now being widely described as a “crisis”, with as many as a thousand people arriving by boat each day on the Kent and Sussex coasts, a situation that the Home Secretary Suella Braverman described as “an invasion” yesterday.
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