Sterling lost around 1% against the US dollar and 0.3% against the euro yesterday. After yesterday’s GDP data – bad, but too bad – this morning there has been unemployment and earnings data. The results were mixed, with both being fractionally higher than expectations.
That will be it on the data front, but the real action will be around interest rates, with the Bank of England’s decision on Thursday at 12 noon.
It looks likely that a relatively dovish stance will be taken, with a quarter of a percent increase in rates so as not to risk slowing the economy more than necessary. This would nevertheless take rates to their highest since 2009. Any divergence from that has the potential to move sterling.
