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The UK inflation number came in above expectations this morning at 8.7% annualised growth. This should mean that tomorrows interest rate decision by the Bank of England will result in a further 25 point hike to 4.75%. This is not what the Bank of England was hoping for. Previous predictions indicated an expected drop in inflation as energy prices come under control. Maybe the BoE will throw the kitchen sink at tomorrows rate decision and go for a 0.5% increase although this is unlikely.
The Pound initially leapt versus all the majors including the Dollar, Euro and the Australian Dollar. However the gains have almost all been given back already.
On top of that the public sector net borrowing came in much higher than expected at over £19 billion in May when analysts expected just over £14 billion. Not many glimmers of hope for the UK economy right now.
Today sees Canadian retail sales numbers out before a raft of speeches from the FED in the US, so Dollar rates could be under scrutiny today.
As you would expect business headlines are dominated by the inflation story and the potential for rate hikes.
CAN: 13:30 Retail Sales
US: 15:00 FED's Jerome Powell Testifies
US: 15:00 FED's Lisa Cook Speech
US: 15:00 FED's Philip Jefferson Speech
US: 16:40 FED's Austan Goolsbee Speech
US: FED's Loretta Mester Speech
