Sterling strengthened briefly against the euro yesterday morning but returned to Friday’s level by the end of the day.
The direction of travel was mainly downwards for GBP/USD and the pound was roughly 0.5% down on the day.
It’s an exceptionally busy week for data, and the first release with the power to move the market was unemployment this morning. It rose slightly ahead of expectations to 4.2% in October, but so did job vacancies, despite the end of the furlough scheme. Average earnings, however, were also fractionally ahead of expectations, rising at 4.3%.
Tomorrow we’ll see inflation (will it follow the US, where inflation rose to 6.8%, a 39-year high?) and then the interest rate decision on Thursday.
In the business news, a survey by the Institute of Directors (IoD) of British companies that make imports from the EU has found that a third of them are “not at all prepared” for the full system of post-Brexit customs checks which comes into place at the end of the year. “This will exacerbate existing supply chain problems, leading to further congestion at ports, as well as extra costs from accidental non-compliance for many businesses” said the IoD’s chief economist.
In politics, Parliament will vote today on new ‘Plan B’ measures to tackle the Omicron variant of Covid-19, with a large-scale rebellion against the government from its own MPs likely. However, with Labour MPs supporting the measures they will be passed.
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