The pound has weakened slightly this morning following disappointing retail sales data.
Data on Wednesday showed that inflation rose to a 30-year high in December. Markets now expect, with near certainty, the Bank of England to raise interest rates to 0.50% at its February monetary policy meeting.
The effects of inflation are already becoming visible on household budgets, with retail sales falling 3.7% in December, a time when Christmas usually gives sales a boost.
As many as 66% of UK adults have said their cost of living has increased over the last month. Consumer confidence is at a near-yearly low, falling to -19 in January as people express their concerns over rising prices.
