Read More HereU.K. Inflation, Jobs Data to Buoy Pound, Societe Generale Says
By Justin Carrigan
May 12 (Bloomberg) -- The pound is likely to be helped by data showing falling U.K. jobless claims and signs that accelerating inflation will prompt the Bank of England to raise interest rates, according to Societe Generale SA.
The British currency fell 0.2 percent against the dollar and 0.1 percent versus the euro today after Conservative leader David Cameron struck a deal with the Liberal Democrats to form a coalition government in place of Gordon Brown’s Labour administration.
“The political change should remove a substantial part of the uncertainty that has been weighing on sterling of late,” a team of Societe Generale strategists led by London-based Vincent Chaigneau wrote in a report. “Evidence of further recovery in the U.K. labor market today as well as market speculation about changes in the monetary policy outlook following the release of the BOE quarterly inflation report should be supportive for the pound.”