In the UK, the Producer Price Index is set to add a meager 0.1% through February to bring the annual pace of wholesale inflation to an 18-month low at 3.1%. The metric foreshadows further downside in consumer prices, the headline inflation gauge, as firms pass on lower manufacturing costs through cheaper finished products. On balance, the metric is unlikely to have much of an immediate impact on British Pound price action after the Bank of England suggested it was done cutting interest rates after the last reduction to a record-low 0.50%. The policy statement accompanying the rate decision warned of the potential dangers of taking borrowing costs too low and signaled that Mervyn King and company would now embark on a policy of quantitative easing.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
