Following the revelation yesterday that UK inflation reached a 10-year high in November, the pound is still stronger this morning ahead of the Bank of England’s meeting later.
Expectations for an interest rate hike from the Bank of England have risen following the higher-than-expected inflation. However, officials have the difficult task of weighing this up against an increasingly uncertain economic backdrop, brought about by the emergence of the Omicron variant.
The European Central Bank will also hold its December monetary policy meeting today. Typically taking a more ‘dovish’ stance than other central banks, officials will reveal policy plans for 2022.
The Federal Reserve’s meeting concluded yesterday, and officials revealed measures that should pave the way for interest rate hikes next year. However, the dollar is weaker this morning.
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