At the start of the week I mentioned four data releases that would have the power to move sterling significantly. All were key economic indicators of the current and near-future state of the economy: employment, inflation, consumer confidence and retail sales.
The first of the four was released on Monday, on jobs, and showed that the economy has essentially returned to its pre-pandemic state. The second, inflation, was released this morning and has leapt far ahead of expectations to 4.2%, with a 1.1% rise in October.
Hence the pound has strengthened by another 0.5% or so against the euro this morning.
We’ll have to wait until Friday for the two other indicators, but if you were betting on an interest rate rise in December you may well think it worth cashing in your chips now.
We expect to be very busy over the next few days with clients booking forward contracts at this exceptional rate, so do call your trader on 020 8003 4915 to lock it in for the year ahead.
