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Market Comment - Inflation - 18th August 2021

Posted by Andy DyerAugust 18, 2021

Good morning,

So the UK published it's inflation numbers this morning. The expectation was for 2.2% and came in at 2%. The report looks to be a game of 2 halves with clothing, footwear and package holidays cheaper than 12 months ago, however fuel is higher for the same comparison.

So what does that mean for the Pound. Generally speaking a lower reading than expected means the Pound could weaken. However, with the sell off we have seen in the last week this effect might be less than expected.

The overall picture for the Pound remains the same at time of writing in that the UK seems to be on top of the Coronavirus unlocking and vaccination roll out. Eyes are on the Moderna vaccine for approval to be deployed to the teen population.

Outside of this there appears to be an element of "risk off" in the markets with what's going on in Afghanistan. This could cause a bit of strength in the Greenback, At the moment this appears to be the story dominating outcomes so we are keeping a close eye on developments.

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

US: 13:30 Retail Sales

UK: 07:00 CPI and RPI Data (Inflation)

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