Excel Currencies Blog

Yesterday afternoon, the Pound fell 0.5% across the board as the UK bond market caused havoc. 2-year bond yields initially hit the highest level since Liz Truss's mini-budget disaster and then went close to the 2008 levels. All due to investors worrying about the state of UK inflation. With a surge in borrowing costs, nervousness spread and down came the Pound.

Things got back on track this morning however for GBP after the latest jobs data confirmed that the UK has a unique inflation issue. A set of above forecast results showed people in jobs increased, wages and bonuses grew and the unemployment rate dropped. The exact opposite of what was expected and required really for inflation to fall. 

The BoE have made themselves very clear that unless wages stop climbing and the unemployment rate starts rising, interest rates will continue to be hiked. This is good news for the Pound and for consumers with savings and pretty much bad news for everyone and everything else.

More volatility will arrive this afternoon as we learn the latest US inflation number and hear from BoE Governor Bailey on his thoughts on the jobs data released earlier..