LONDON: A sharp fall in sterling just before June UK inflation data on Tuesday reignited concern among financial traders that official economic data is seen by some market players ahead of release time, despite restrictions on official access to the numbers.
Britain's statistics chief said last month he would stop giving government officials early access to sensitive economic figures ahead of publication, reducing from July 1 how widely the figures are disseminated confidentially before publication.
While the Office for National Statistics says this move was not in response to queries about leaks into the marketplace, it followed reports by Reuters and the Wall Street Journal that showed unusual pre-release trading patterns in the pound that often correctly anticipated the subsequent price direction.
After rising to a 10-month high of $1.3126 half an hour before the data, sterling sank just over half a cent in the minutes before the 0830 GMT release and almost another half-cent immediately afterwards.
The ONS said it did not comment on market rumours. Traders and analysts were quick to point to the currency moves as raising fresh question marks over whether the official numbers were being kept confidential.
"Given the suspicions that ONS data was being leaked to the market it is worrying to see another correct move just before the release," said David Woolcock, Chair of the Committee for Professionalism at ACI the Financial Markets Association, a body representing foreign exchange dealers.
"The measures taken by the ONS may possibly have been insufficient."
Several market participants contacted by Reuters, all of whom spoke on condition of anonymity after the data, raised concerns about the moves but also said there were other possible reasons that owed more to re-positioning of the marketplace.
The pound had been lifted sharply against the dollar ahead of Tuesday's figures by an overnight drop in the greenback, even as some major currency dealing banks such as Barclays had below-consensus forecasts for the upcoming inflation release.
"You've got to put it in the context of where we are - a 10-month high in cable before the data and inflation already its highest in four years. It makes perfect sense for sterling to soften a little bit given those factors," said Michael Hewson, chief analyst with CMC Markets in London.
"The new ONS methodology came into effect on July 1 and it's only July 18. If it's still happening in a few months time then they may need to have another look at it."
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