Money News Overview Wednesday 14th February 2024: UK CPI remains stable

Data-wise, the Eurozone flash PMIs for October were roughly consistent with predictions. The industrial sector remained in deep contraction area.

The UK January CPI was released earlier this morning and remained steady at 4.0%, despite market forecasts of a 4.1% increase. Core inflation, excluding energy and food, remained constant at 5.1%.

It is expected that CPI inflation will resume its downward trend next month and return to the 2% target by the spring. Nonetheless, Bank of England policymakers are likely to be wary about lowering interest rates too quickly.

Looking ahead, the Eurozone economy is predicted to expand somewhat in Q1, while its largest economy, Germany, is expected to stagnate. Next week’s German IFO and Eurozone flash PMI surveys will provide additional evidence of the strength of activity in early 2024.

Currency-wise, the dollar was on the rise. Meanwhile, the euro and yen were on the defensive. Indeed, EUR/USD and EUR/GBP reached new year-to-date lows. As trading begins this morning, the euro remains extremely close to current levels.

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