Weekly Roundup: Pound fluctuates on UK government’s Autumn Statement
Amy Richards November 21st 2022 - < 1 minute read
Negative headlines regarding the UK’s retail sector saw the pound initially weaken last week. GBP investors are growing increasingly nervous amid rising pressure on businesses.
Sterling then rebounded on Tuesday with the release of the UK’s latest jobs report. While unemployment unexpectedly rose in September, this was offset by the accompanying earnings figures, which reported a surprise acceleration in wage growth.
A sharper-than-expected increase in domestic inflation then began to reverse these gains on Wednesday, before the pound was able to find its feet again thanks from some hawkish comments from Bank of England (BoE) Governor Andrew Bailey.
The unveiling of Chancellor Jeremy Hunt’s long awaited Autumn Statement then infused fresh volatility into the pound on Thursday. While bond markets gave their tacit approval to Hunt’s tax and spending plans, GBP investors were spooked by his confirmation that the UK is in a recession.
Closing out the week was the publication of the UK’s latest retail sales figures, with GBP exchange rates strengthening after a larger-than-expected rebound in sales growth last month.
Looking ahead, the pound could stumble later this week, following the release of the UK’s latest preliminary PMIs. Growth in the UK’s private sector is expected to have remained firmly in contraction territory this month, likely denting GBP exchange rates.