Even though Brexit has weighed heavily on the outlook as evidenced by the latest indications that EU negotiations remain hung on several issues, the broader economy continues to progress. Inflation figures pointed to a renewed surge in inflation after consumer prices rose 2.90% on an annualized basis while core prices climbed 2.70%. In addition to the headline inflation optimism, the unemployment rate fell to a new multi-decade low of 4.30%, though sluggish wage growth weighed on sentiment. Regardless, the Bank of England signaled its intention to begin gradually removing accommodation over the near-term, helping the Pound push to a new 1-year high against the US dollar.
Shifting gears, US inflation also experienced a pickup, with core inflation printing at a 1.70% annualized pace of increase through the end of August as the headline figure came in at 1.90%. Apart from economic data, US crude inventories rose for second straight week amid record US gasoline stockpile draw-downs as shuttered refining capacity gradually comes back online after the impact of Hurricane Harvey. To round out the week, efforts by policymakers to cool housing speculation and rampant debt growth are starting to take shape and leave a lasting impact. Growth in Chinese industrial production slipped to 6.00% from 6.40% while fixed-asset investment faltered to its lowest expansionary pace since 1999.