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Sterling bulls need wages catching up on inflation to believe

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There are two sides to the U.K. inflation story. Headline inflation remains elevated, beating expectations today. The other part is wage inflation, and we won't get the next update on that until next week.

It seems that second figure is playing on the minds of rates and currency traders, as the beat in CPI gave only a modest boost to both. Policy maker Gertjan Vlieghe said yesterday that tightness in the labor market was having some upward effect on wages and that helps explain why the BOE is in a tightening cycle. Markets will wait for confirmation of that in the data before taking the pound and short-sterling implied yields materially higher.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov


 Varchev Traders

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