Hunt to Meet UK Industry Leaders

The Chancellor of the Exchequer Jeremy Hunt is due to meet with industry leaders in the UK this week in a bid to establish how government and industry can work together to tackle inflation. The meetings come on the back of PM Rishi Sunak warning that the government will up its efforts to drive down inflation, seeking to tackle what it calls “greedflation”: the culture of profiteering around recent price increases.

Sunak to Crack Down on Corporate Greed

Speaking on Sunday, the UK PM warned that corporate profiteering as well as ballooning pay-rise requests were keeping inflation entrenched at higher levels. As well as taking a tougher line on corporate profiteering, the PM warned that the government is also looking at a round of public sector wage cuts. These actions fall in line with the sentiments expressed by BOE governor Bailey last week who warned that companies need to stop raising margins and hiking wages in order to tame rampant inflation.

Further BOE Hikes Likely

Along with hiking rates to 5% this month, the highest level for 15 years in the UK, the BOE also signalled that further hikes will likely be needed. With the latest UK CPI figures showing an uptick in inflation last month, the BOE still has a hard fight on its hands. GBP has weakened on the back of the meeting over fresh growth concerns as traders fear the downside impact of further rate hikes this year.

Technical Views

GBPUSD

The rally in GBPUSD saw the pair breaking out above the top of the bull channel and above the 1.2659 level. However, the move has run out of steam for now, with the pair correcting lower back towards the 1.2659 level. While this area holds as support, the focus is on a further push higher with 1.2992 the next target. Below here however, 1.2437 is the next key support to note.