BoE will hardly close to the door to further hikes amid looming inflation and rising wages! | MarketTalk: What’s up toda

Show notes

Inflation in the US came in slightly better than expected by analysts. The headline inflation slipped below the 5% psychological mark – to 4.9%. Core inflation eased to 5.5%, and the monthly headline figure jumped to 0.4% from 0.1% printed a month earlier, as expected.
Fed rate cut expectations jumped again. The consensus is that the Fed's latest rate hike was certainly its last for this cycle, and the Fed will cut the rates by 75bp before the year ends.
US yields and the dollar fell, equities found support. Nasdaq advanced to highest levels since last August.
Across the Atlantic Ocean, the Bank of England (BoE) is expected to raise its interest rate by 25bp when it meets today, but it will certainly leave the door open for further hikes.
Released yesterday, a report from Reed showed that average wages in the UK grew 10%, matching the rise in cost of living. While that’s good news for workers, a 10% rise in salaries means that inflation will likely be stickier and harder to combat and require further rate hikes.
On the currency front, the divergence between the Fed and the should support the medium term bullish outlook for Cable for a potential advance toward the 1.30 mark.
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