Headline news for Sterling.
Consumer Price Index up 3.2% year on year posted at 7am this morning.
Largest ever year on year increase measured by the CPIH National Statistic.
Ok, so that sounds dramatic. Now let’s put some more down to earth context around it. This is comparing August 2020 to August 2021. One of the major contributors to the increase is the “Eat Out To Help Out” campaign run last August. Therefore restaurant prices this year appear to be much higher. The other main contributor is the cost of transport. It’s been well documented how lorry drivers are now at a premium as we see empty shelves in supermarkets and you can’t buy a shake at McDonald’s. This news has had a slightly positive effect on the Sterling rate as a decent increase was expected by traders.
Outside of that Sterling gave back some of it’s great gains yesterday afternoon in what looks to be some technical profit taking. However the Pound still looks strong so we would expect it to recapture previous gains if no further news or data dents it.
Looking ahead it’s mainly New Zealand data out that could affect GBP/NZD rates with their GDP data out later this 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
NZ 23:45 GDP data
AUS 02:30 Employment Data