Market Commentary: Thursday 14th August

Positive data came out in the UK this morning: UK GDP rose by 0.3%, beating economists’ estimates of 0.1%. The UK economy held up despite businesses and consumers being hit by Rachel Reeves’ £26 billion payroll tax raid and US tariffs. This further raises the bar for the Bank of England to cut interest rates.

JPY rose by 0.7%, currently trading at 146.34 against the USD. This followed US Treasury Secretary Scott Bessent’s comment that the Bank of Japan is “behind the curve” in addressing inflation and should be expected to hike rates. It is rare for a foreign official to comment on another country’s monetary policy, and this may make it more difficult for the Bank of Japan to act at the next meeting due to concerns about the market narrative that the central bank is acting under political pressure.

On the economic calendar today, we have Norway’s rate decision at 9:00 am, Eurozone’s Q2 GDP at 10:00 am, and US July PPI at 1:30 pm.

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