This morning’s UK inflation figures have come in hotter than expected, adding fresh uncertainty to the Bank of England’s interest rate outlook. Meanwhile, markets await further central bank commentary and US economic data.
Inflation Hits 3.5%, Surpassing Expectations
UK inflation jumped to 3.5% in today’s reading, beating economists’ forecasts of 3.3% and up sharply from 2.6% the previous month.
This 0.2 percentage point surprise is likely to prompt a rethink of the Bank of England’s path for interest rates over the rest of the year.
While markets had priced in multiple rate cuts for 2025, today’s data may force policymakers to adopt a more cautious approach. A single additional cut now looks more likely than multiple moves.
Central Bank Speeches in the Eurozone
Across the Channel, today brings two important speeches from European Central Bank policymakers – one already delivered at 7am and another due at 5pm.
These updates are closely monitored by investors for signals on future interest rate policy within the euro area, especially as inflation and growth concerns continue to evolve.
Light Data Day for the US
It’s a quiet one for US data releases today, with only the weekly petroleum status report due at 3:30pm.
This report, which measures changes in commercial crude oil inventories, typically has a muted impact on currency markets unless it deviates significantly from expectations.
US Data Tomorrow: Employment and Housing in Focus
Looking ahead to tomorrow, attention turns to two key releases from the United States:
- Weekly unemployment claims are expected at 230,000, slightly above last week’s 229,000 – still a positive sign for the labour market.
- Existing home sales are forecast at 4.1 million, up from 4.02 million the previous month, suggesting continued resilience in the US housing sector.
Both data points will offer valuable insights into the strength of the US economy and could influence dollar sentiment.
Stay Ahead with Qu Money
With inflation surprises, central bank signals, and key data shaping the global currency landscape, staying informed is crucial.
For personalised support in managing your FX exposure – or to take advantage of opportunities amid market shifts – speak to a Qu Money expert today.