Sterling has recovered some of its mid-July energy against the euro, ending last week up a little and still clear (around 1%) of last year. The pound has also moved up to its best on the US dollar since early May. Indeed, GBP/USD is a good 10% above the average of the past five years.

And it has done all that while negotiating another change of prime minister – and one of a more leftward disposition, which doesn’t always find favour with the currency markets.

So what’s next? This week there’s plenty of potentially impactful domestic data coming down the line. First up will be unemployment and earnings tomorrow. While unemployment will likely grab the headlines, projected to fall slightly from last month’s 4.9%, the Bank of England will also be looking closely at the average earnings figure. This has been running at 3.4% (excluding bonuses), not markedly above inflation, but any signs that workers are demanding higher wages and potentially causing an inflationary spiral will raise worries at the Bank.

Then on Wednesday we get the actual inflation figure for the UK. Last week the USA revealed inflation of 3.4%. However the core inflation rate, without fuel and food, was only 2.5% and falling, not suggesting any immediate need to raise interest rates. If the UK’s also falls it could hit sterling exchange rates, as investors look elsewhere for a better return.

The pound and euro beat the safe-haven currencies (USD, JPY, CHF) last week, as worries over oil supplies receded. But will that positivity have extended to business leaders? We will get that reading this week, with the Purchasing managers Index (PMI), a global poll of business mood, on Friday.