The pound continued its recent upwards trend against the single currency yesterday after inflation unexpectedly rose in February and Bank of England Governor Mervyn King said the central bank's quantitative easing programme may be reduced if it is successful. Consumer Price Inflation rose to an annual rate of 3.2%, despite many expecting that it would actually fall to 2.6%. As expected the Retail Price Index fell, but not into negative territory yet, with it currently sitting at 0%. Mervyn King stated that CPI’s surprise jump was due to the pound’s weakness making imports more expensive. It was also interesting to note that King warned against further borrowing to stimulate the economy, due to the already dire state of the UK’s finances.
The Confederation of British Industry release their distributive trades survey this morning, whilst IFO release the business climate and expectations survey in Germany.
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