Sterling lost approximately half a per cent yesterday against major rivals the euro and US dollar, respectively, immediately after UK inflation eased to 3.9% a 28-month low.
The softer-than-expected UK inflation reading of 3.9% reinforced forecasts for the Bank of England to start cutting interest rates in early 2024. Prime minister, Rishi Sunak said, the latest fall in CPI was “good news for everyone in this country.”
One group of people failing to benefit from falling inflation is private tenants. According to data from the Office for National Statistics, the cost of renting a property from a private landlord has been rising at the fastest rate since records began in 2006. In the year to November, rents increased 6.2%.
In the eurozone, construction output fell by 0.7% year-on-year in October, following a revised 0.7% rise in September. This is the sharpest contraction the industry has seen since March, driven by declines in building activity and civil engineering works.
Eurozone consumer morale, however, was boosted in December, adding 1.8 points to reach -15.2. This is the highest consumer spirits have been in five months and beat market expectations of -16.4. This suggests that buyers are optimistic that the European Central Bank will be able to combat high inflation early next year.
Yesterday, junior doctors in the UK began their three-day strike in the battle for a 35% pay rise, as the NHS struggles with the toughest winter on record. The strike will end at 7am on Saturday.
Frasers Group, headed up by Mike Ashley, bought luxury fashion retailer Matches Fashion in a deal worth around £52 million. The deal is said to be part of the Group’s “elevation strategy”.
Today is relatively quiet for economic and political data with a few figures from the US later this afternoon. Among them is the GDP growth rate which is forecast to have expanded an annualized 5.2% in quarter three of 2023.
Tomorrow, the spotlight will remain on the US with a flurry of data coming in from 1:30 pm (UK time) including core price index figures, durable goods orders, personal income and personal spending stats.
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