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The Bank of England (William Barton / Shutterstock.com)
The markets were relatively quiet yesterday due to a lack of influential data releases, however, the pound held steady, making marginal gains against the euro and US dollar.
Addressing students of Loughborough University yesterday, governor Andrew Bailey said the Bank of England is seeing signs of an “upturn” in the economy. He also mentioned that the Bank’s latest forecasts point to a “somewhat stronger growth story.”
This morning we heard that the UK unemployment rate declined to 3.8% in the fourth quarter of 2023, down from 4.0% in the three months to September and slightly below market forecasts of 4.0%. This is the lowest rate seen since this time last year.
The pound edged higher against the US dollar following this announcement.
HR body, the Chartered Institute of Personnel and Development (CIPD) said yesterday, in its regular labour market outlook, that workers in the UK can expect smaller pay rises this year as employers are reigning in hiring plans despite improved business confidence driven by the services sector.
Mobile operator Three, issued apologies to customers yesterday as over 10,000 experienced outages after service problems over the last few days. Downdetector, which tracks outages, showed that more than 12,000 people had reported some sort of fault.
The price of Bitcoin hit $50,000 yesterday for the first time since December 2021, despite a mishap surrounding a commercial that was scheduled to debut during the Super Bowl on Sunday night. This milestone comes amid growing optimism for the BTC, which is believed to be supported by US president, Joe Biden.
This morning, markets will receive the February readings from the ZEW economic sentiment for the euro area and Germany. Both sentiments are expected to improve slightly.
Later on, inflation readings for the US come in hot and heavy, with core inflation and the year-on-year inflation rate. Markets forecast the core rate to fall from 3.9% in December 2023 to 3.7% in January.
Early tomorrow morning, we’ll hear whether UK inflation met expectations in January. Markets forecast an uptick in both the headline and core rates, which is expected to increase to 4.1%.
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GBP: All eyes on GDP
Sterling investors will be keeping an eye out for the release of UK GDP figures for quarter four of 2023, which could confirm a technical recession in the latter part of last year.
GBP/USD past year
EUR: Edges lower against pound
The euro fell slightly against the pound yesterday ahead of key UK economic data on Wednesday and Thursday which includes UK CPI and GDP.
EUR/GBP past year
USD: One-year inflation unchanged at 3%
The latest Survey of Consumer Expectations from The Federal Reserve Bank of New York showed on Monday that the US consumers’ one-year inflation expectation held steady at 3%.
USD/EUR past year
