Sterling on the back foot

Sterling was on the back foot yesterday falling to just over 89p versus the euro and $1.32 against the dollar following MPC members testimony to the Treasury Committee. The euro also fell back against the dollar to mid-$1.17

Bank of England MPC members gave some conflicting signals on their views for the future path of monetary policy at the Committee. Governor Carney reiterated that the ‘judgment of the majority of the committee is some rise in interest rates over the coming months may be appropriate’, although his Deputy David Ramsden stated that he was not part of this majority

UK annual inflation rose to 3.0% in September, up from 2.9% in August, further intensifying the squeeze on household’s disposable incomes and is now at its highest level since early 2012. According to the Bank of England, inflation is expected to nudge even higher peaking ‘above 3% around October’

The OECD warned the UK a disorderly exit would “hurt trading relationships, reducing long-term growth’ in its latest economic survey. It forecasts headline UK GDP growth of 1.6% this year before slowing to just 1.0% next year, unchanged from its interim forecast in September

Data due today includes mortgage applications and housing starts in the US along with the Fed’s Beige Book and labour market statistics in the UK