Sterling claims back yesterday's losses
| UK inflation rises for the first time in 10-months.. |
| Just a blip or is UK inflation much stickier than most believe right now? I guess we will find out the answer to this question next month, but the data and trends all suggest the former is at play. Then again, nothing surprises anyone in the financial markets so inflation, stagflation and recession may all be very real risks to the economy if this isn't a one-off scenario. Headline inflation in the UK rose to 4% in December, up from 3.9% and higher than the expected 3.8%. The more important core inflation number remained unchanged at 5.1%, which was higher than the 4.9% forecast. It means the Pound has been lifted, due to money markets repricing bets on when the BoE will cut interest rates. £-$ was trading at a 5-week low on opening, but has since recovered some ground after yesterday's losses since the inflation report. The pair as-well-as £-€ both remain favourable. |
