Sterling strengthened against the euro yesterday afternoon to a two-and-a-half month high and is still strong this morning, following mixed UK jobs data and poor economic sentiment data from the EU. Whilst the European economy appears to be suffering due to the coronavirus, the UK economy is expected to continue to enjoy a post-election lift.
The ECB have hinted that they may cut rates again in the near future, whilst it’s expected that the Bank of England will keep rates on hold. UK unemployment rate came in as expected at 3.8%, whilst average earnings came in slightly lower than predicted. The new employment figure beat forecast at 180,000 compared to the 145,000 predicted, however, jobless claims fell significantly.
Sterling was also helped by news that the new Chancellor of the Exchequer, Rishi Sunak, will go ahead with the Budget as planned on the 11th of March.
Today is also a busy day for data, with inflation rate expected to come in at 1.6% this morning. This will be followed by retail sales figures tomorrow.
