Sterling outperformed its major peers yesterday, driven by a sharp repricing of Bank of England interest rate expectations. Following the rise in headline inflation to 3.4%, and bolstered by today’s news of retail sales growth, markets have all but ruled out a rate cut in the first quarter. This has bolstered the pound’s appeal to yield-hungry investors. The pound has gained on the euro and is holding its ground against the dollar as the threat of UK-targeted tariffs fades. We still have the Purchasing Managers Index (PMI) coming up this morning, but that’s the end of the current round of high-level data.
GBP/USD past year
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