Daily Archives: August 17, 2010
Sterling slips slightly ahead of key inflationary data
The Pound has lost a minor bit of ground against a basket of major currencies in early morning trading as investors anticipate Mervyn King to have to send a letter to the government for the 8th month running – He has to do this to explain himself when inflation is above 3%.
Although higher inflation generally leads to a higher chance of interest rate hikes in this case it may not always be seen as postiive as the higher inflation gets effectively the general public in the U.K are taking a pay cut as everything costs more yet wages are highly unlikely to be increased.
Unless there is a major change to the expected data then I do not forsee huge changes to the value of the Pound today however as regular readers will be aware absolutely anything can happen on the currency markets and surprises are no surprise these days!
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