Subsequent to last Friday’s retail sales data, which were perfectly acceptable, the only UK ecostats of any significance were Tuesday’s provisional purchasing managers’ indices from Markit. They, too, were a touch better than expected, with manufacturing at 58.2, services at 58.6 and the composite at 57.7. The report stated that customer demand “continued to rise sharply in November”. However, at the same time, there was “another month of rapid input cost inflation” – a problem not unique to Britain.
Bank of England Governor Andrew Bailey made several appearances, during which he made every effort to avoid hinting about the timing of the next interest rate move. He told the Sunday Times that he had never said there would be a rate hike in November. He told the House of Lords that he was inclined to scrap forward guidance altogether, and he said much the same to the Cambridge Union, saying, “The boundary between a commentary and guidance is quite murky, actually, when you think about the words we use”. Investors were left none the wiser, and the rate outlook became murkier still following the announcement of a new ‘Nu’ Covid variant. On average, sterling was unchanged on the week.
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