Sterling rallied early in the week on a string of better-than-expected economic updates, but couldn’t achieve total domination on continued Brexit drama and negative rates speculation after the Bank of England’s latest monetary policy meeting.
United Kingdom Headlines and Economic data
UK payroll numbers fell by 695,000 between March and August – less than the previous estimate for job losses between March and July. – the employment picture looks dire to say the least, but given that the numbers were better-than-expected is likely the reason for the bounce in Sterling after the event.
UK diner discounts push inflation down to near five-year low, but the 0.2% m/m read in August was better than an expected read of 0.0%, likely a contributor to Sterling’s rally after the data release.
Bank of England warns of ‘unusually uncertain’ outlook, reveals negative rates under consideration – it looks like traders focused on the idea of negative rates as it may have been a bit of a surprise that the BOE was very dovish given the recent bounce / better-than-expected reads in economic data.
Tighter national rules considered for England by government – this may have been the driver for the pound’s turn lower during Friday session after Health Secretary Matt Hancock said BBC the government is “prepared to do what it takes” against Covid-19, sparking fears of another total lockdown.