MPC throw a curve ball

22 June, 2018

Paul Newfield

Yesterday was supposed to be a fairly quiet day for the pound, with little news of significance from the eurozone to impact on the rates. However, the MPC threw up a little surprise as, at noon, the expected and previous vote for a rate hike did actually change from 7-2 in favour of no hike to 6-3, showing that more committee members are in favour of an interest rate hike predicted to be for this coming August.

The pound started off in good form as the borrowing figures for the public sector were also way down on the previous and expected level of over £5bn, coming in at only £3.356bn, at 9:30 am. Despite the poor economic growth in the first 3 months of the year, it is seen as short-term negativity by some of the committees with the likelihood of improvement late this year as “probable”. The positivity saw sterling climb over the ¾ cent against the euro and a cent-and-a-half against the US dollar.

Today is lacking in any UK data of note with plenty from Europe, Canada and the US, so the decent levels seen yesterday could all but be wiped out depending on which way the eco-stats turnout. Between 8 am and 9 am we have Markit services stats from France, Germany and the EU, with Canadian retail sales and CPI at 13:30, with more Markit data from the US at 14:45 in the form of manufacturing PMI, services PMI and PMI composite.

With very little to support the pound today, it may well be wise to stay in touch with us to book your currency at the highest level possible and stay ahead of the markets.