Friday was quiet for economic data in the UK, although BoE governor Mark Carney did deliver a speech in Dublin. The day before, Carney had talked about how a no-deal Brexit could be as damaging to the UK economy as the global financial crisis. Investors either didn’t believe him, or were confident the UK will agree a deal, because the pound climbed to a six-week high against the dollar.
We did hear the unfortunate news that British Steel is cutting up to 400 jobs, citing the weakness of the pound as a chief reason. The raw materials the company uses are all traded in dollars, so the weakening of the pound and the euro has affected their budgets. I wonder if British Steel has thought about hedging their exposure?
It is an extremely quiet start to the week for UK economic data, but on Wednesday we will see the inflation figures for August, as well as the retail price index for the same month. Inflation is expected to fall to 2.4% from 2.5% the month before which would confirm wage growth is outpacing inflation at the moment.