Closing summary
Time for a recap, after a day in which the pound climbed despite hints from a Bank of England deputy governor that interest rate cuts could soon be on the agenda…
…the government faced a deepening bill for protecting households from energy bills….
…. budget airline easyJet launched a recruitment drive urging people over the age of 45 to join its cabin crews…
… single parents bore the brunt of the surge in food inflation….
… the RMT vowed to press on with rail strikes unless a pay deal was finally reached…
…business leaders and unions urged Rishi Sunak to abandon a planned bonfire of EU regulations….
… boot maker Dr Martens flagged rising prices…
…Kingfisher reported a jump in sales of energy-efficency products…
…and chip firm Nexperia vowed to keep fighting the government’s decision to block its takeover of a semiconductor factory in Newport.
The pound continues to rally against the US dollar, reaching a new three-month high of $1.213.
Hopes that the US central bank will slow its interest rate increases are continuing to lift sterling to the highest since August.
Matthew Ryan, head of market strategy at global financial services firm Ebury, says that optimism that Britain’s recession will be mild are also helping.
Once again, macroeconomic data out of the UK came in stronger-than-expected on Wednesday, a common trend in the past few months.
Activity data out of Britain continues to largely dumbfound some of the bleak predictions, which have warned of a deep and prolonged contraction. The November composite PMI came in well above consensus, edging up to 48.3 (from 48.2). While still in contractionary territory, and consistent with a mild recession, this is far from levels that would suggest a deep downturn is in the offing.
Markets mostly overlooked comments from BoE chief economist Pill on Wednesday. His comments were largely in line with the bank’s recent rhetoric, saying that more rate hikes would be required, though not to the extent priced in by markets.”
