Inflation data pushes GBP lower
Weak inflation sent the pound lower on Wednesday, adding further weight to the speculation surrounding a potential interest rate cut at the Bank of England’s January meeting. UK Inflation rose at its weakest rate in three years coming in at 1.3% for December, falling below expectations of a 1.5% rise.
This figure brought more pressure to the pound, having fallen in recent days after several Bank of England policymakers have hinted at the possible need for an interest cut at the next policy meeting. Expectations increased earlier in the week following poor growth figures and slow industrial production.
Before the inflation figure announcement, another Bank of England interest rate setter backed a cut. Michael Saunders said that borrowing costs should be cut because of the weakness in Britain’s labour market.
12:30 – EUR: ECB Monetary Policy Meeting Accounts.
13:30 – USD: Retail Sales; expected to increase to 0.4% from previous 0.1%.
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