Inflation, Retail Data, and Rising Global Tensions
Interest Rates & Inflation
| Region | Interest Rate | Inflation |
|---|---|---|
| 🇬🇧 UK | 4.00% | 3.8% |
| 🇪🇺 EU | 2.15% | 2.2% |
| 🇺🇸 US | 4.25% | 2.9% |
United Kingdom
Wednesday 22nd – Consumer Price Index (CPI)
What is it?
The leading indicator of inflation in the UK.
Previous: 3.8% Consensus: N/A (Core CPI expected to rise by 0.1%)
📈 Market Impact: A higher reading would imply further distance from the BoE’s 2% target, reinforcing expectations of earlier rate hikes — bullish for GBP.
Wednesday 22nd – Retail Price Index (YoY)
What is it?
Measures average price changes of a set basket of goods and services, another key inflation gauge.
Previous: 4.6% Consensus: 4.7%
📈 Market Impact: A high reading supports GBP strength and increases pressure on the BoE to maintain tighter policy.
Friday 24th – Retail Sales
What is it?
Tracks the volume of retail sales to end consumers, a key indicator of consumer spending.
Previous MoM: -0.5% Consensus: -0.2%
Previous YoY: 0.7% Consensus: N/A
📉 Market Impact: Expected weakness in sales could weigh on GBP sentiment.
Eurozone
Friday 24th – HCOB Manufacturing PMI
What is it?
A leading indicator of manufacturing sector activity.
Previous: 49.8 Consensus: 49.5
📉 Market Impact: A weaker reading below 50 signals contraction, suggesting marginal downside risk for the Euro.
United States
Friday 24th – Consumer Price Index (YoY)
What is it?
The key measure of inflation in the US.
Previous: 2.9% Consensus: 3.1%
📈 Market Impact: A higher reading implies growing inflationary pressure, increasing the likelihood of further rate hikes — bullish for USD.
Key Market Updates
- Israel escalates conflict by attacking Hamas and bombing Lebanon; aid to Gaza suspended.
- China’s economy grows at its weakest pace in a year.
- The EU struggles to protect domestic industries from US and Chinese competition.
- Starmer’s efforts to reset UK–China relations have reportedly caused further strain.
- UK labour market data came in weaker than expected last week.
- Donald Trump announces 100% tariffs on “all critical software” imports from China.
Why this matters
This week’s data releases could spark sharp moves in currency markets. For businesses and individuals with upcoming FX needs, even small shifts can have a meaningful impact on costs and margins. Our team can help you manage the risks and position yourself to benefit from opportunities.
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