Sterling received a big boost this morning after a key piece of inflation data hit the wires. Consumer Price Index in the UK accelerated to 2.9%, higher than the economists’ consensus. The surge can be accredited to the higher clothing prices, where prices hit a decade high. The greater than expected reading has added further fuel to the fire for the Bank of England to raise interest rates this year. However, adding to the policy headache for the BoE, was the gap between CPI and average earnings which continues to widen. Sterling is up nearly 1% against the Euro and Greenback today.
Sticking with the UK, the government’s bid to extract the UK from EU law in time for Brexit has passed its first parliamentary test. The parliament voted 326 to 290 to let Prime Minister Theresa May’s Brexit law advance. May’s Brexit plan remains on track and this will count as a small win for her strategy.
Another big day for the UK tomorrow as wage growth is released. Average earnings in the UK is forecast at 2.3%, a slight uptick from the previous reading. We also have the release of the Headline Jobless Rate, forecast sticky at 4.4% and the Claimant Count Change from the UK as well. In the afternoon, the US release their PPI figure and last month’s Crude Oil Inventories.