The pound is still trading around stronger levels against the euro and the dollar this morning following higher than expected inflation figures, which were released yesterday.
Today, the Bank of England will hold its latest monetary policy meeting. Following the inflation data, expectations for an interest rate hike have risen back to 50%. However, the central bank will need to weigh up the economic uncertainty surrounding Omicron verses higher inflation.
Sterling could react to actions and rhetoric from the Bank of England later. The markets will be listening closely for any ‘dovish’ or ‘hawkish’ signs.
We’ll see a series of PMI data this morning before the meeting, which will give an indication of how the UK economy has performed so far in December.
