GBP weakens as BoE expects an uptick in inflation to be temporary

Pound Sterling weakens as BoE expects an uptick in inflation to be temporary

The Pound Sterling weakens against its major peers even though the United Kingdom (UK) Consumer Price Index (CPI) report for January showed that inflationary pressures accelerated at a faster-than-expected pace. In the 12 months to January, the headline CPI rose by 3%, faster than estimates of 2.8% and the December reading of 2.5%. In the same period, the core CPI – which excludes volatile components of food, energy, alcohol, and tobacco – grew by 3.7%, as expected, faster than the former reading of 3.2%.

Month-on-month headline CPI inflation deflated at a slower-than-projected pace of 0.1%, compared to the 0.3% growth in December. Economists expected headline inflation to deflate at that pace this month. Read more…

GBP/USD Forecast: Pound Sterling fails to benefit from strong inflation data

GBP/USD struggles to hold its ground and trades marginally lower on the day at around 1.2600 in the European session on Wednesday. The pair’s technical outlook highlights a loss of bullish momentum.

The data published by the UK’s Office for National Statistics (ONS) showed on Wednesday that annual inflation in the UK, as measured by the change in the Consumer Price Index (CPI), climbed to 3% in January from 2.5% in December. This reading came in above the market expectation of 2.8%. Other details of the report showed that the Services CPI declined by 0.2% on a monthly basis, not allowing Pound Sterling to benefit from the stronger-than-forecast headline CPI reading. Read more…