The UK’s Consumer Price Index rose by 2.7% in October from the previous year. Expectations were for a rise of the CPI from 2.2% to 2.3%. Core CPI rose by 2.6% and was expected to tick up from 2.1% to 2.2%. RPI jumped 3.2% and was predicted to rise from 2.6% to 2.9%. All the figures are year-over-year. The higher than expected numbers may deter the BOE from expanding the QE program again.
GBP/USD was struggling in recent days, and traded around 1.5890 Â prior to the publication, rising before the data was actually published.
The Bank of England has a target of 1-3%, so inflation is still in range, although leaning higher.
Also producer prices exceeded expectations: PPI input was expected to fall by 0.4% but actually rose by 0.4%. PPI Output came out within expectations and rose by 0.1%.
Tomorrow, the UK will publish employment figures, which might better show where the economy is headed after an impressing Q3. See how to trade the employment data with GBP/USD.
The pound has been on the back foot after losing the 1.60 line. 1.56 is major support, but it’s still far.
For more on cable, including technical levels, see the GBPUSD forecast.
