This morning, the United Kingdom reported that the inflation of the services remained unchanged in 4.7% in June, compared to the expectations of a 4.5% deceleration, says Francesco Pesole, FX Analyst of ING.
The markets continue to value two rate cuts for the end of the year
“The inflation of the services remained stable and, in fact, when observing some of the basic services measures (which exclude different volatile/less relevant categories), most of these increased a bit. The IPC of services probably fluctuates around these levels during the rest of the year, before drastically falling next spring. A good part of what is promoting the inflation of the services at this time are significant increases in this time are significant price increases. They produced in April, most of which are inherently retrospective or regulated. ”
“These will disappear next year, what the Bank of England is well aware. Even so, this means that the barrier to cut rates faster continues to feel quite high; we expect cuts in August and November. But tomorrow’s employment data is key; if we see another bad payroll figure, that would put a lot of pressure on the bank to change in a more moderate direction.”
“The pound is being modestly stronger after the publication. The risks associated with tomorrow’s employment data are probably preventing any larger revaluation of a hard line in the Sonia curve and, by extension, keeping the GBP profits contain. EUR/GBP back above 0.870. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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