Weekly Roundup: Pound slumps amid cooling inflation
Amy Richards July 24th 2023 - < 1 minute read
The pound failed to find a clear direction at the start of the week as a lack of UK data and a mixed market mood impacted the British currency.
Sterling then faced choppy trade on Tuesday as markets waited for the latest consumer price index.
The CPI print triggered a selloff midweek, after both headline and core inflation printed below expectations for the first time in five months. Markets scaled back their expectations for more Bank of England interest rate hikes in response.
This kept the pound on the defensive through to the end of the week. A better-than-forecast retail sales print on Friday lent Sterling some support, although it wasn’t enough to see GBP rise against its stronger peers.
This week, the pound has come under renewed pressure after the UK’s latest PMI results came in far worse than expected. As well as showing a slowing economy, the surveys revealed signs of easing inflation.
As a result, markets may continue to reprice their BoE expectations as the week unfolds, which could keep pressure on the pound.
Mid-tier releases from the Confederation of British Industry (CBI) could potentially cause some movement through the remainder of the session. Could further signs of a deteriorating UK economy dent GBP?
Written by
Amy Richards