It is of interest to see the pound strengthening, in particular against the Euro.
With the Euro now at 1.26 to the GBP, cheaper imports will start to have an effect on keeping a lid on prices, whether goods supplied to industry or to the consumer. Many business people are already thinking of not having the “price increase”, in xx months’ time, this thought may become “need to reduce our prices to stay competitive”.
Plenty of available labour that is “the whole of Europe” will continue to keep UK wage inflation to the minimum.
Therefore low interest rates could continue for some years to come, with “deflation” becoming more of a concern (as in Europe).
Any more thoughts?