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Sterling shrugged off Wednesday’s PMI data, which showed overall business pessimism, but no worse than expected, to rise strongly against most major currencies through the middle section of the week.

The markets’ positive mood surrounds the defeat of the Scottish independence referendum case at the Supreme Court and the promise of a Swiss-style arrangement with the EU (hotly disputed by Downing Street).

With a dearth of data this week comments by Bank of England Monetary Policy Committee members have been noted. While both Huw Pill and Dave Ramsden have been hawkish on rates for the moment, Ramsden said he could see a potential fall in rates if and when inflation becomes less of a concern. Current betting is on a rise in rates to 3.5%, but a 75 basis point rise to 3.75% is also possible.

This morning we’ve heard that car production leapt way ahead of expectations to 7.4%. Going behind the percentage rise, however, production remains well below pre-pandemic levels as a chip shortage continues to slow production.

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