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Workers are returning to the jobs market, headline inflation to plunge in 2023, Bank of England to end rate hike cycle sooner than expected.
UK inflation could peak at 12% in October according to a number of new economic forecasts made in the wake of Wednesday's release of inflation data for June that showed prices are already rising at their fastest pace in 40 years.
The Pound dipped briefly against a softer Dollar on Wednesday after Office for National Statistics (ONS) figures revealed a new high for UK inflation but otherwise offered little sign of the "second round effects" that could catalyse a more aggressive interest rate response from the Bank of England (BoE).
GBP was seen trading firm on the day UK inflation data came in above expectations, confirming the Bank of England might have to go ahead with an outsized 50 basis point rate hike in August.
GBP fell in the immediate aftermath of the release of UK inflation data which came in largely as expected, but some crucial elements of the report were in fact softer and could ultimately prove supportive of the currency.
The targeted nature of the cash boost to UK households from the Government means it is unlikely to be massively inflationary according to analysis from Panmure Gordon.
UK inflation data for April printed softer than expected, prompting the British pound to give back some recent gains.
Rising energy bills stemming from the Russian invasion of Ukraine are fomenting a growing ‘cost of living crisis’ that is dominating the domestic conversation and with worse yet to come, the wisdom of great wartime leaders from the past could again become valuable in the near future.
The British Pound found support following the release of stronger than expected inflation prints from the UK.
Hotter than expected inflation figures have aided Pound Sterling higher against the Dollar, with markets betting the Bank of England will have little choice but to pursue further interest rate hikes.
Most economic forecasters say further price rises are in store for the UK, with most seeing a peak in the current inflationary cycle in April, when the energy bill cap is lifted and the government hikes taxes on employees and employers.
Stronger than anticipated inflation figures out of the UK midweek will keep Pound Sterling bid against the Dollar, says a currency analyst.
In fact, so severe is the inflationary pressure that Capital Economics points out CPI is now further above the Bank of England’s target than at any point since the UK first adopted an inflation target in October 1992.
UK inflation came in hotter than investors were expecting, only a day before the Bank of England meets to decide on whether or not to raise interest rates from record-low levels.
The Pound to Euro exchange rate rose to its highest level in 2021 at 1.1910 after UK inflation beat expectations.
UK inflation came in softer than expected on Wednesday, but with markets anticipating a surge in price rises over coming months the Bank of England remains set to raise interest rates and analysts say the British Pound should therefore remain supported.
UK wholesale gas for October delivery has surged to a fresh high on Tuesday.
UK natural gas wholesale prices surged in the region of 20% midweek taking them to a fresh record high after a large fire at Britain’s main electricity subsea cable with France reduced imports.
The ONS says the rise in UK CPI inflation in the 12 months to August 21 constitutes the "largest ever recorded increase" since the current series began in 1997.
Don't be deceived by the dip in inflation, it's going to heat up say economists.
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