Pound Sterling Fundamental Forecast: Mixed
- UK inflation data next week is likely to overshoot estimate
- Finance minister Sunak mulls fiscal support to assist with energy induced cost-of-living challenges
- Government spending under the microscope: Taking stock of past and current deficits
Source: tradingview, Prepared by Richard Snow
The uncertainty around the pound[1] is linked to the fact that despite lofty rate hike expectations, domestic challenges (inflation, higher taxes, weaker growth outlook) continue to drag the pound lower. The dollar appears to have halted the post-FOMC[2] pullback and looks supported heading into the weekend - which is negative for the pound. Despite the dollar recovery GBP/USD[3] bounces off the lower bound of the descending channel, moving higher on Friday.
UK Inflation Data Topping the Risk Events for Next Week
Wednesday is a rather busy day for the pound as it sees the latest UK inflation data as well as the half-yearly budget speech. UK inflation continues to hot up with early indications anticipating a 5.9% print for February. The real talking point shifts to next month’s release which is likely to capture some of the inflationary pressures resulting from the extraordinary spike in oil[4] prices earlier this month. Inflation is expected to peak in April at 8%
Customize and filter live economic data via our DaliyFX economic calendar[5]
Half Yearly Budget Speech in Focus Amid Cost-of-Living Squeeze
UK finance minister Rishi Sunak has emerged from one crisis, the pandemic, only to deal with another in the form of rampant inflation. Sunak is due to announce his half yearly budget update next Wednesday amid increasing pressure to spend billions of pounds to lessen the impact of a growing cost-of-living squeeze. At the same time, the UK
