This week will be all about the central banks. Three major institutions will have their interest rate decisions: FED, ECB, and BoE. From that three, only in the US, we should see some changes.
However, the BoE will be under pressure to raise rates again early next year as this morning’s data shows UK inflation rose more than expected, hitting a near six-year high of 3.1% in November.
The pound was higher after data from the ONS showed UK inflation hitting 3.1%, up from 3% in October, and Core y/y inflation remained unchanged at 2.7%.
According to ONS head of inflation Mike Prestwood, “CPI inflation edged above 3 percent for the first time in nearly six years with the price of computer games rising and airfares falling more slowly than this time last year. These upward pressures were partially offset by falling costs of computer equipment.”
He added that the prices of raw materials and goods leaving factories continued to increase as oil and petrol prices continued to rise.
The Sterling upward trend was muted ahead of UK wages and employment data to be released on Wednesday and the last Bank of England MPC meeting of 2017 on Thursday.