Pound dips on latest UK CPI
Written by
Daily Currency Update
UK consumer price index has seen the Pound dip this morning. Headline annual inflation dropped to 2.8% versus a forecast of 3%, but the Bank of England predicts inflation will peak at 3.75% in Q3 this year, driven by higher energy costs and regulated tariffs on utilities. Increases also in national insurance and living wage, alongside Trump tariffs, points to inflation remaining sticky throughout the year. The increased bets that the Bank of England may cut interest rates in May (from 45% to 55%) might be a little misguided.GBP/USD has dipped below 1.2900 in the past couple of hours, falling from 1.2960 seen yesterday evening. GBP/EUR has also dropped, taking the pair from closely breaking 1.2000 down to 1.1950. EUR/USD continues to trade within a tight range, opening today at 1.0800.
Key Movers
The UK will continue to hold the spotlight today, with Chancellor Rachel Reeves set to deliver her latest fiscal update to parliament later in the session. Reeves is expected to announce further cuts to welfare benefits and government departments in her Spring Statement, as she attempts to close a budget shortfall caused by a rise in borrowing costs since her first fiscal plan released late last year. The chancellor is also expected to announce an additional £2.2 billion pounds for defence spending as the major European countries scramble to boost regional security.Expected Ranges
- GBP/USD: 1.2880 - 1.3040 ▼
- GBP/EUR: 1.1870 - 1.2020 ▼
- GBP/AUD: 2.0270 - 2.0550 ▼
- EUR/USD: 1.0770 - 1.0830 ▲