The U.K. inflation rate held steady in July, falling short of forecasts because of lower oil prices and the
fading effects of the pound’s drop after the Brexit vote a year ago.
Consumer prices increased 2.6 percent from a year earlier, the Office for National Statistics said on Tuesday. Economists forecast a 2.7 percent rate. The pace of factory input-price
gains fell the most since 2012.
Economists this month lowered their estimate for how much inflation will accelerate this year because of sterling’s 13 percent decline since the U.K. voted to leave the European Union. With oil prices also down this year, that means price growth may no longer hit 3 percent, as previously forecast.
The pound fell after the data were published and was trading down 0.4 percent at $1.2907 as of 10:42 a.m. in London.
The report supports Bank of England Governor Mark Carney’s case for waiting to raise interest rates from a record-low 0.25 percent even as inflation breaches the 2 percent target. Just two of the BOE’s policy makers voted to increase the key rate this month. We remain short on the GBP/USD and we will look for short position.
Possible weaker pound against USD, AUD and CAD.
Source: Bloomberg Pro Terminal
Trader - S. Fuchedzhiev
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