On Tuesday, the GBP/USD pair is growing after the publication of the strongest statistics on the inflation over the last couple of years.
The British Pound was supported today by the impressive statistics on the CPI in the United Kingdom. The current quote for the instrument is 1.2289.
The statistics published today indicated that the headline inflation in September increased sharply, stronger than over the last two years, and it happened not because the Pound had weakened. The inflation strengthened by 1.0% y/y against the predicted number of 0.9% y/y and after 0.6% y/y in August. On a month-on-month basis, the CPI added 0.2% in September.
There are two possible versions to explain the inflation growth in Britain. The first one is that the Pound got almost 20% weaker since June 24th
2016, when the country chose to exit the European Union. The second version implies that the inflation increased due to the growth of prices on retails goods, clothes (the biggest increase on a month-on-month basis over 6 years), and fuel.
As far back as two month ago, the Bank of England warned of a possible fast growth of the inflation. At that time, they said that the CPI would reach the target of 2% in less than a year. In the past, the weak inflation didn’t allow the British regulator to change its monetary policy, but now the BoE will have to recalculate its inflation expectations upward.
Investors, who prefer the British Pound, take any possible opportunity to cover at least some part of previous sales.
RoboForex Analytical Department
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