Oil prices fall for a sixth day in their longest losing streak in over a year, as Saudi Arabia reportedly restarts its east-west pipeline and amid hopes for progress in US-Iran talks
The pound has dipped below $1.33 this morning, as the dollar has strengthened against a number of currencies, on the back of expectations of interest rate hikes in the US.
Matthew Ryan, head of market strategy at the global financial services firm Ebury, said:
The pound has sunk below 1.33 against the US dollar this morning, as investors prioritise hawkish Fed rhetoric and the upward repricing in US rates over any tailwinds to the UK economy from this week’s drop in global oil prices.
The Bank of England has, of course, also placed outsized importance on the energy crisis for the path of its policy rate - suggesting that any hikes would be effectively contingent on a continuation of the conflict - so the recent pullback in oil prices should undercut the case for hikes just as much as it offers relief to UK growth.
September is seeing a worrying combination of disappointingly sluggish economic growth and intensifying inflationary pressures, with subdued business confidence and high costs meanwhile continuing to discourage hiring.
Output growth across the manufacturing and services PMI surveys has slowed to a pace consistent with the economy growing at a mere 0.1% quarterly rate.
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