Bank of England deputy governor Ben Broadbent has said that the fall in the Pound’s value has acted as an important "shock absorber" for the economy. According to Mr Broadbent, it is "likely" that inflation will rise above the Bank's 2% target in the next couple of years. However, he also warned that controlling prices with tighter monetary policy could impact on economic growth and jobs.
Yesterday, the High Court heard that consent from Parliament is "not required" for Theresa May to go ahead with implementing Brexit. With Mrs May announcing that Article 50 will be triggered by the end of March 2017, campaigners argue that the Prime Minister does not have the power to do this without Parliament’s prior authorisation. The three-day hearing will end today.
The Pound was under further pressure yesterday on reports that Chancellor Philip Hammond could step down, after arguing with MPs regarding immigration controls. Mr Hammond has been attempting to put the brakes on the Government's "hard Brexit" plans, and is quoted saying that the UK needs to keep control of its borders “while protecting our economy, our jobs and our living standards”.
Today sees the release of the latest UK inflation data. This is expected to have jumped to a near two-year high last month, even before sterling’s latest slump has had an impact amid Brexit price hike concerns.
9:30 AM – GBP : CPI year on year, forecast at 0.9% on a previous of 0.6%
13:30 PM – USD : CPI month on month, forecast at 0.3% on a previous of 0.2%
13:30 PM – USD : Core CPI month on month, forecast at 0.2% on a previous of 0.3%