One Step Forward, Two Steps Back
UK inflation remained unchanged at 3.1% in August. That's more than was expected and well above the BOE's target of 2%, and means that poor old Mervyn "the swerve" King has to get his pen and paper out to say sorry to the Chancellor for the eighth month in a row.
Rising food prices was one of the reasons that inflation refused to come down, and certainly from that perspective I wouldn't be expecting a significant shift back towards the 2% target any time soon.
That could be construed as bullish for sterling as it may mean an interest rate hike sooner than the market has been expecting.
That got the pound back on the road to recovery, after an early slump following news that house prices fell to their lowest levels for 15 months in August.
That lent weight to some fears that the dreaded "double-dip" recession might still be on the cards for the UK and it's magic money printing machine.
We're down against the euro on talk that strong economic growth in Germany will help the euro-zone as a whole. The euro is also up to a two month high against the dollar on euro-zone growth optimism, that might weigh on Paris grains today.
Rising food prices was one of the reasons that inflation refused to come down, and certainly from that perspective I wouldn't be expecting a significant shift back towards the 2% target any time soon.
That could be construed as bullish for sterling as it may mean an interest rate hike sooner than the market has been expecting.
That got the pound back on the road to recovery, after an early slump following news that house prices fell to their lowest levels for 15 months in August.
That lent weight to some fears that the dreaded "double-dip" recession might still be on the cards for the UK and it's magic money printing machine.
We're down against the euro on talk that strong economic growth in Germany will help the euro-zone as a whole. The euro is also up to a two month high against the dollar on euro-zone growth optimism, that might weigh on Paris grains today.
