Sterling stabilised yesterday, recovering around 0.5% as markets seemed to reconsider the previous week’s dramatic fall. That has continued this morning with better than expected inflation data.
Prices rose by 0.2% in the year to the end of August, which was down on the previous month’s 1% but still better than expected. The effects of the Chancellor’s Eat Out scheme undoubtedly boosted the restaurant trade by cutting prices by up to 50%, while VAT has been cut in the hospitality sector too.
Speaking of food, the pound could be supported by news that a ‘thin’ UK-EU trade deal is nearing completion. This would cover such issues as food standards, at least ensuring that food and drink imports continue to flow next year.
