The UK has woken up to the news that inflation has risen at the fastest pace for 30 years. Coming in at a 6.2% rise, the reading has halted sterling in it’s tracks once again after a positive day of gains against both the euro and US dollar yesterday.
The Spring statement is due for release today and Chancellor Rishi Sunak is under pressure to help struggling UK households. Recently Money Saving Expert Martin Lewis has said he is out “out of tools to help people now” and has described this as a worse period than the financial crash in 2008 and also the Covid pandemic throughout 2020. Pressure has even come from the Tory party where some MPs have called on the Chancellor to take measures to ease the cost at the petrol pumps and also soaring energy bills. The balancing act for Sunak however is clawing back some of the deficit following bold Covid measures and ensuring the country is “stronger” moving forward.
How the pound will react throughout the day remains to be seen, GBPUSD is down 0.5% since the announcement and trading above 1.32. The Chancellor is due to announce his plans in the House of Commons at 12:30pm, where traders will be keeping an eye on what measures are drawn up to help the UK and in turn, help the pound.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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