Talking Points
- UK inflation hit 2.7% in April, above both the forecast 2.6% and the prior 2.3%.
- That makes a Bank of England interest rate increase more likely and is positive for GBP.
- Check out the DailyFX Economic Calendar and see what live coverage of key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.
UK inflation was expected to rise to 2.6% in April from March’s 2.3% but, in the event, it came in higher than expected, at 2.7%, making it more likely that the Bank of England will increase UK interest rates. However, such an increase is still a long way away.
A higher-than-expected figure for the increase year/year in the UK consumer price index might have been expected to lift the British Pound but after an immediate jump it quickly fell back, again rejecting the strong resistance level of 1.30.
Similarly, EUR/GBP dropped at first but then rallied strongly. There was also a sharp rise for the FTSE 100 index of leading London stocks.
--- Written by Martin Essex, Analyst and Editor
To contact Martin, email him at martin.essex@ig.com
Follow Martin on Twitter @MartinSEssex
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