The British Pound had a better day on Tuesday, finishing in second place behind the EUR on our one-day performance table, with GBP/USD having been up on a 1.39 handle for the first time since Friday and GBP/AUD having briefly revisited 1.77.
UK inflation figures were released Tuesday morning, with the headline CPI stuck at 3.0% rather than falling to 2.9% in line with consensus expectations. The Office for National Statistics noted that, “The largest downward contribution to change in the rate came from prices for motor fuels, which rose by less than they did a year ago. The main upward effect came from prices for a range of recreational and cultural goods and services, in particular, admissions to attractions such as zoos and gardens, for which prices fell by less than they did a year ago.” It’s not often that the cost of looking at giraffes and penguins moves international foreign exchange markets, but the GBP got a lift from the fact that inflation didn’t fall as had been anticipated.
In separate figures, UK house price growth accelerated to 5.2% in the year to December, up from 5.0% in November. The house price index compiled by the Office for National Statistics and the Land Registry shows average UK house price hit £227,000 in December 2017, up £1,000 from the previous month and £12,000 higher than in December 2016. Scotland and the South West experienced the highest annual house price growth, registering 7.7 per cent and 7.5 per cent respectively. Average prices in England rose 5 per cent in the year, to £244,000 while Wales saw house prices increase by 5.4 per cent over the last 12 months to stand at £154,000. The pound opens in Asia this morning at USD1.3875, GBP/AUD1.7665 and GBP/NZD1.9075.