Upbeat UK GDP data for May was reported yesterday


Yesterday we experienced some positivity for Sterling following upbeat GDP numbers for the month of May. GDP rose 0.5%, up from the previous reading of -0.3%. Understandably it was only one reading but Sterling found comfort in this after recent weeks of volatility. Should we continue to see an increase in GDP, it may cause the Bank of England to rethink their monetary policy plans moving forward. Analysts still expect a negative quarter for GDP later this year as the UK economy is still largely at risk to enter a recession.

When it comes to politics, Rishi Sunak has found himself at the top of the race for the next leader of the Conservative party. Both Jeremy Hunt and new Chancellor Nadhim Zahawi were removed from the pool following the first vote. Mr Hunt later came out and provided his backing to Rishi Sunak. Voting in Westminster will continue today, and a final vote from party members could happened next month.


Forty-year high inflation was the topic of conversation yesterday. US CPI soared to 9.1% in June, this data came in at a much higher rate than the expected 8.8%. Core inflation did however come in at 5.9%, below the previous 6%. This clearly shows price pressures are here to stay. All of this gives the Federal Reserve a lot to think about its next step to help control inflation. We still expect a significant rate increase at the next Fed meeting but what happens thereafter remains to be seen.

Finally, the dollar remains well supported against all majors – trading at a two-year highs against the pound and at twenty-year highs against the euro.