Pound Sterling has remained fairly level this morning after UK Inflation figures for last month beat expectations and rose slightly to 3.4%. UK Inflation remains the highest out of the G7 countries even with an economy struggling to grow, but it should be noted that the belief in general is that these price increases will start to slow sharply in the coming month’s as contributing factors such as Utility Costs and government tariffs will fall outside of the annual comparison.
Specific price rises came in the form of increased Tobacco taxes and elevated Travel costs throughout the Christmas period. The belief that prices will gradually slow is mainly due to the fact that when you strip out volatile items such as Food, Alcohol and Tobacco, prices actually remained steady at 3.2%. The reason for The Pound being pretty much unchanged is because slightly elevated Inflation potentially allows the Bank of England to keep Interest Rates unchanged in next months meeting.
Elsewhere, The Dollar continues to be weighed down after Trump doubled down on his threats to take control of Greenland ahead of key speeches at The World Economic Forum in Switzerland. Trump has stated he believes he can create a scenario where all parties involved can be happy but reiterated his views of needing control of Greenland for security purposes. Trump is set to speak later this afternoon and again is set to further escalate his plans, having stopped short of ruling out military action if required. Further developments will no doubt weigh heavily on the US Dollar.
GBP/EUR 1.1445 GBP/USD 1.3400 GBP/AED 4.9236
GBP/AUD 1.9864 GBP/CHF 1.0622 GBP/CAD 1.8550
GBP/NZD 2.2940 EUR/USD 1.1693 GBP/ZAR 21.9172