Are you keeping up with the latest news from the Stock Market and Wall Street? Here at Extreme Investor Network, we have exclusive insights and analysis that you won’t find anywhere else. Let’s take a look at the recent UK inflation report and its impact on the Bank of England interest rate path, as well as the reaction of GBP/USD to the news.
The Office for National Statistics reported that the UK annual inflation rate held steady at 2.2% in August. The Consumer Prices Index, including owner-occupier housing costs, rose by 3.1% in the 12 months to August, unchanged from July. The Core CPIH, which excludes energy, food, alcohol, and tobacco, increased to 4.3% in August. The CPIH services annual rate also saw a hike, driven mainly by airfares.
With these inflation numbers in mind, analysts were expecting the Bank of England to keep interest rates at 5.0%. However, the unexpected rise in core inflation to 3.6% may prompt the central bank to hold off on a rate cut. Strong retail sales figures could further delay any potential rate cuts in the near future.
In the currency markets, the GBP/USD pair reacted to the news with a initial drop to $1.31517 before bouncing back to $1.31722. Following the release of the inflation data, the pair surged to a high of $1.31783. As of Wednesday, September 18, the GBP/USD was up 0.10% to $1.31740.
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