Producer prices in the U.K. rose for the sixth straight month in August on the back of higher oil prices, with the index increasing 0.2% from the previous month amidst expectations of 0.3% rise , while the annualized rate slipped 0.4% from the previous year after falling 1.3% in July. Moreover, input prices surged 2.2% during the month, which topped expectations for a 1.0%, while prices fell 7.5% from the previous year. At the same time, core prices rose 0.2% from in August, while the annualized rate rising 0.7% from last year, and the data encourages an improved outlook for inflation as the Bank of England takes unprecedented steps to stimulate the ailing economy. As the outlook for price growth improves, the central bank is likely to maintain its current policy throughout the second-half of the year, and long-term expectations for higher interest rates may drive the British pound higher over the coming months.
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