The cost of living crisis appears to be coming to a head this week. Ofgem have reported another energy price rise in September to £2800 per year which is a further £800 on top of the rise we saw at the end of March. This has led to reports that the Prime Minister might introduce help for consumers as early as tomorrow. It's suggested Boris Johnson is meeting Rishi Sunak today and that he has been taking counsel from a number of eminent economists. The issue is how much help would be needed to make a significant impact rather than a token gesture, and how that help would be paid for. Even a windfall tax on energy companies wouldn't really touch the surface....however a positive press conference tomorrow might move the media focus away from Partygate....
GBP/EUR has taken a bit of a move to the upside following the significant drop yesterday on the back of the poor Public Sector Net Borrowing numbers. However the rate is still towards the bottom of the mid term range.
GBP/USD is a similar story.
Let's have a look at other major FX pairs. Euro/Swedish Krona is locked in a sideways pattern that it's been in for the last 2 weeks. This is the same for GBP/AUD which remains well off it's recent highs and locked in a similar sideways, narrow channel. GBP/CAD has been in a nice choppy uptrend for the last couple of weeks and Pound/Turkish Lira has been in a great uptrend throughout May.
Today it's the turn of the Bank of Japans Governor to give a speech although this may well be overshadowed by US centric news later in the day. We have Durable Goods data out from the US first followed by their Federal Open Market Committee meeting minutes later in the evening.
As ever we look forward to keeping you in the loop and look out for our next update.
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Today’s Economic Calendar
EUR: 10:45 ECB Philip Lane Speech
JPN: BoJ Governor, Haruhiko Kuroda, Speech
US: 13:30 Durable Goods Orders
US: 19:00 FOMC Meeting Minutes
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