The GBP AUD exchange rate was -0.40% lower on Wednesday after the latest UK inflation report saw prices at a forty-year high. The latest numbers will intensify pressure on the UK government to act and protect struggling households, while there is also a potential for higher prices from the current 9% level.
The GBP to AUD was trading at 1.7700 and is still trying to find a base at that support level.
Pound sterling hit by inflation rates surge to 9%
The pound sterling has been weighed by the latest inflation report, which showed prices at a 40-yr high of 9%.
Economists had projected a move to 9.1% from 7% in the latest reading and will intensify pressure on the government to take action over living costs.
The Bank of England has already said that inflation will reach double digits, so the sterling move is a little surprising, but the pair is still trying to find a base at the 1.7700 level.
Labour is looking to force the government’s hand with a vote in parliament for an emergency budget to help with the cost-of-living crisis.
Rachel Reeves, the shadow chancellor, said it was “unconscionable” that the government was piling taxes on working people during the crisis and renewed calls for a windfall tax on oil and gas producers.
“Today’s inflation data will add to the worries families already face as prices soar and pay packets are crunched,” she said.
Rishi Sunak is facing further pressure from his own backbenchers as well as from Labour and the Lib Dems to provide more help for struggling families.
Labour called for a VAT cut on energy bills and more help on energy costs for the lowest paid. For the pound sterling, the situation only gets worse for government finances. The tax increases of late were to shore up the government budget, but the latest crisis will stretch it once more.
Australian election polls see gap tightening in final stretch
Australia’s election result has become too close to call, according to polls released on Wednesday, with the incumbent conservative coalition narrowly closing the gap with the opposition Labor Party.
Australia goes to the polls in three days and the centre-left Labor’s lead over the Liberal-National coalition has shrunk to 51-49% from 54-46% two weeks ago, according to a poll by the Sydney Morning Herald.
Another poll from the Guardian had indicated that Labor’s lead had dipped to 48-46% from 49%-45% two weeks ago.
Prime Minister Scott Morrison described the latest numbers as “really encouraging”, while Labor admitted the election would be “incredibly close”.
With the country set to vote on Saturday, the debate has been dominated by rising living costs, while national security and climate have also been a major factor.
Meanwhile, Labor’s finance spokeswoman, Katy Gallagher has shot down finance minister Simon Birmingham’s claim that Labor’s policies will cost $440bn.
It’s “dodgy costing”, she said, but hinted that Labor’s deficit would be bigger than the Coalition’s when it is released on Thursday.
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