UK interest rates remain unchanged
16 September, 2016
Yesterday we saw the UK Retail Sales figures for August follow the positive footsteps of July and came in better than the economists’ expectations. It would seem that the UK is continuing to shake off the effects of Brexit and carry on as normal. The Pound did experience a short boost of the back of the release but was quickly returned back to previous trading levels, as its follows an array of poor data over this past week meaning any gains are short lived. In the afternoon GBP-EUR traded lower than in the morning, no surprise as sentiment was likely to be driving rates at that point prior to the Bank of England’s latest interest rate decision.
The minutes were uneventful as committee members made a unanimous vote to hold benchmark rates at 0.25% and keep quantitative easing unchanged at £435bn. There is now speculation that the bank will consider future projections during its November forecast round and it is expected that at that time a majority of members will support a further rate cut.
EUR Consumer Price remained unchanged and Trade Balance data saw a small change but again not enough to cause any significant movements to the markets. The afternoon’s attention turned to the US which posted an mixed bag of poor and positive figures. In particular, industrial production posting below expectations and Retail sales which expected a figure of -0.1% but instead posted -0.3%. The question now is will these poor figures dim the chances of a FED rate hike next week?
Today is quiet for UK data and we have a quiet morning with only EUR Labour cost data for Q2 out at 10:00am. At lunchtime the US release their Consumer Price Index figures for August and then later at 15:00pm is the Reuters/Michigan Consumer Sentiment Index for September. As ever if you have an upcoming requirement then stay in touch with your CI account manager and the team here at Currency Index will be pleased to help.
P.s Don’t forget to ask us about our Forward contracts! A great tool to consider to reduce your market exposure and secure your currency at today’s rates for just a 10% deposit!
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