It was another positive day for the pound yesterday, remaining stable against the US dollar and euro, and gaining against the Japanese yen. This morning sterling has strengthened again.
Then were no data releases of note yesterday, at least on the sterling side of the equation, although in Germany producer price inflation (PPI) decreased well ahead of expectations, by 1.1% last month.
The biggest story in the UK was the further weakening of the housing market, which affected building company shares. Rightmove said that asking prices has slipped by 1.9% in August, more than double the usual seasonal fall. This helped depress shares in UK housebuilders by 2.9%.
Going the other way, petrol prices have risen to above £1.50 a litre for the first time since January, while gas prices rose sharply due to the risk of industrial action on gas platforms in Australia.
An opinion poll for The Times found that prime minister Rishi Sunak and his government were getting little credit for falling inflation. Only 8% gave him credit, while 17% said it was down to the actions of the Bank of England and 38% said it was down to external factors.
However, Sunak and the chancellor Jeremy Hunt will have been cheered by the news this morning that public borrowing has risen by less than expected. If continuing, that could offer some limited scope for pre-election tax cuts next year.
In business news, weather continues to affect trade, with a lack of rainfall in Panama meaning that traffic through the canal is being restricted. And in New York, the UK-based chip designer Arm is set to be the biggest US IPO in two years, when it lists on the Nasdaq with a potential valuation of $70bn.
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