The Pound struggled during yesterday’s session after the UK’s inflation eased more than expected in July after hitting a five-month high in June. Consumer prices rose 1.6 percent on the year in July the Office for National Statistics said, economists had expected inflation to fall to 1.8 percent. Separate data from the ONS showed house prices in Britain had started to moderate, adding to signs from other surveys that the rapid pace of house price growth is starting to calm.
Consumer price inflation is expected to float below the official target of 2% until the third quarter of 2017, according to Bank of England's (BoE) August Inflation Report medium-term forecasts.
Official figures from the US revealed home construction rebounded in July and the cost of living rose at a slower pace, showing a strengthening U.S. economy has yet to generate a sustained pick-up in inflation. A 15.7 percent jump took housing starts to a 1.09 million annualized rate, the strongest since November due to an improving job market and cheaper borrowing costs.
As inflation continues to run below the Federal Reserve's target, it gives the central bank room to keep interest rates low well after the projected end of its bond-buying program in October.
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