Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.
The UK has tentatively continued to show signs of decelerating inflation in 2024. Research company Kantar published data on Wednesday 3rd January that showed grocery price inflation falling at the fastest pace on record in December, with annual inflation falling from 9.1% in November down to 6.7% in the run-up to Christmas. Figures released by the British Retail Consortium earlier in the week showed food price inflation also fall to 6.7% from 7.7% the previous month.
While these declines can, in large, be attributed to Christmas promotions, with nearly a third of spending in the run-up to Christmas made on offer purchases, it represented the high proportion of promotional spending since December 2020 and also the busiest Christmas for supermarkets since 2019.
UK growth data was released by the Office of National Statistics this morning, showing GDP had grown by 0.3% from October to November 2023, more than the 0.2% expected by markets. This was a significant increase from the previous month after the economy contracted by 0.3% from October to November. The rebound was driven by growth in the services sector, which benefitted from the Black Friday Sales, with the ONS reporting strong months for retail, car leasing and computer games companies.
The pound remained steady against the dollar and the euro following the news, sitting just above 1.275 and 1.16 respectively. Although, the GBP/USD rate is most likely driven by the ongoing dollar weakness we’ve seen since the end of last year.
It’s been a quiet week for the euro this week. Although last week we saw EU inflation data indicate that it had rebounded in December.
Germany’s preliminary CPI data for the last month of the year came in at 3.7% year-on-year (YoY), 0.5% higher than the same metric in November. It was a similar story in France, where YoY inflation rose from 3.5% in November to 3.7% in December. Across the entire Eurozone, there was an inflationary uptick after six months of decline, rising from 2.4% in November to 2.9% in December. However, this figure was slightly below the economists’ forecast from a Reuters poll by 0.1%.
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