Imported inflation, FX volatility is undesirable - Rabo Bank

In this segment, Rabo Bank’s senior FX Strategist Jane Foley downplays the optimism triggered by upbeat UK economy data in face of Brexit and warns about a potential slowdown if the exchange rate remains volatile …leading to rise in imported inflation. Foley talks to Tip TV's Zak Mir.

Key points

As of now, the UK economy is not feeling the heat of Brexit; however, it may do in future. Service sector is likely to feel the pinch of rising costs due to imported inflation (via weak Pound)

Financial industry stands exposed to Brexit if the institutions do not retain passporting rights

By middle of the next year, many companies could be feeling the pinch of imported inflation

Exchange rate (Pound) volatility by itself is a disincentive to investment

Dollar-Yen pair is a Fed play. 105.00 could act as a psychological resistance

Noteable change in view at BOE - Bank can no longer afford to look through rise in inflation beyond a certain level

Is the UK economy out of the woods or the worst is yet to come? - Watch the full video

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