10.01.202313:51 Forex Analysis & Reviews: Rishi Sunak is in no hurry to make concessions and raise wages

UK Prime Minister Rishi Sunak said UK inflation is not certain to slow down this year so there is a need to continue influencing wages in order to limit their rise despite ongoing negotiations with striking sectors, including the National Health Service and the railways.

Sunak has come under criticism over promises to halve inflation this year. This is despite the forecasts of the Budget Authority that the rate of price increase will slow down significantly as it is without any additional intervention from the government.

Rising energy prices in the UK led to inflation exceeding 11% last year, causing a cost-of-living crisis. The Prime Minister and many other politicians have also changed for this reason. The new Prime Minister, Rishi Sunak, has decided to take seriously the issue of containing price rises, which is his top priority and the reason why he is resisting calls to adopt high public sector wage demands as this is sure to spur yet another rise in inflation.

However, unrest is now taking place all over the country as citizens are pushing for a 19% pay rise. Another issue is that Sunak refused to answer the question of whether he has private medical care, saying it was of little consequence. This has become a growing political problem for the prime minister, who is under pressure from both members of his own Conservative Party and the general public.

Talking about the forex market, yesterday's rise in GBP/USD is gradually slowing down, so buyers need to stay above 1.2140 in order to maintain their advantage. The breakdown of 1.2200 will push the pair to 1.2260 and 1.2301, while a drop below 1.2140 will bring it to 1.2090 and 1.2040.

In EUR/USD, there is a chance to update the December highs, but this is only if the pair breaks above 1.0760. Such a move will push euro to 1.0790 and 1.0850, while a fall below 1.0720 will bring it to 1.0680 and 1.0650.