The pound strengthened yesterday after inflation rate data was released, coming in higher than forecast. Inflation rose for the first time in 6 months, jumping to 1.8% in January of 2020 from 1.3% in December and above market expectations of 1.6%.
It’s now closer to the Bank of England’s 2% target and possibly reduces any expectations of a rate cut in the near future.
However, the pound then weakened as worries over trade negotiations continue. Michel Barnier reiterated his point that the UK cannot have a Canada style deal with the EU, prompting an immediate response from the Prime Minister. Johnson accused Barnier of backtracking on the original offer made in 2017.
The Downing Street press office also tweeted to state that in 2017, the EU had said that a Canada style deal was “the only available relationship for the UK.”
Retail sales data will be released this morning, which is expected to show a growth year-on-year and a drop month-on-month.
