The latest UK CPI figure was released this morning and remained steady at 3%, beating the markets expectations. The increase in prices of recreational and cultural goods and services counteracted the downward contribution from motor fuels. The bullish figure will provide further support for the Bank of England to raise rates quicker than they originally planned. The BOE hinted last week, they could be tempted to change their original rate hike plans, with the first one being predicted for May instead of November as originally planned.
The US CPI figure posted better than expected at 2.1%, remaining steady with the previous month’s reading. Increases were seen in the prices of petrol, shelter, apparel, medical care and food. The bullish reading boosted the Greenback as fears remain that the Fed might need to raise rates faster than originally thought. The Fed are expected to raise rates three times this year. However, thanks to the bullish economic data coming out of the US lately, they might need to raise rates an additional time. The markets are expecting the first of these rate hikes to take place in March.
Back in the UK, Foreign Secretary, Boris Johnson delivered the first in a series of speeches to be given by the UK Cabinet. His speech was entitled ‘a United Kingdom’ and aimed to bring a divided nation together. In the speech, he asked those who are determined in stopping Brexit, to withdraw their efforts, as Johnson believes stopping Brexit would be a disastrous mistake. He continued to mention a second vote would cause another year of turmoil and feuding. This is the first speech trying to unite the nation and will be followed by the Brexit Secretary, David Davis, the International Trade Secretary, Liam Fox, and the Cabinet Office Minister, David Lidington in the coming weeks. These will be rounded off by a speech by Theresa May.