Dear Reader,

Today's overview of economic news and market action:

• Risk averse mood on markets throughout last week …
• BoE hiked rate by 50bps following higher than forecast inflation …
• The market now expects  UK Bank rate to peak above 6% …
• Despite this though, sterling found itself under some downward pressure …
• EUR/USD opens this morning just above $1.09 …
• GBP/USD is changing hands in the lower half of $1.27-1.28 …
• EUR/GBP is operating above the halfway mark of 85-86p …
• This week, the focus will be on US and Eurozone inflation data …

Higher and Higher

Inflation remains a key aspect of the discourse on the global economic outlook and the trajectory of interest rates.

BoE hikes by 50bps to 5% and retains bias to do more

The June meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank announce a 50bps rate increase. 

ECB hikes rates by a further 25bps, but not done yet

As had been widely expected, the June meeting of the ECB’s Governing Council saw the central bank raise rates by a further 25bps, pushing the key deposit rate up to 3.5%.