Tuesday: ’£ soars on expectations of rise in interest rates, Wednesday: ’Inflation falls and knocks £ down as interest rate rise now less likely’
All in the space of a day. First, wages were rising by more than inflation, so the £ went up as this would mean interest rates should rise to make sure we don’t spend our pay rises and cause more inflation. But a strong £ makes stuff we import cheaper (especially oil, which is paid for in $) so that should bring inflation, already falling, down more. And it makes our exports more expensive, so companies won’t do so well, which could mean wages won’t rise.. Ever decreasing circles? I’d go and sit in the garden while the sun’s still shining if I were you.
