GBP price, news and analysis:
- GBP / USD rising after the UK’s August inflation data showed a record jump.
- Together with a strong UK employment figure on Tuesday, inflation rates will increase pressure on the Bank of England to reduce its stimulus program and thus increase pressure GBP.
GBP / USD rally after strong UK inflation data
GBP /USD is again higher after the sharp rise in the general interest rate in the United Kingdom in August, bringing it to 3.2% per annum: above both the previous 2.0% and the 2.9% consensus forecast of analysts polled by news agencies. Core inflation also increased more than expected.
Inflation data for the United Kingdom
Source: DailyFX economic calendar
With both the United Kingdom employment and if inflation rises faster than forecast, more members of the Bank of England’s monetary policy are likely to become convex, potentially closer to the day the bank tightens UK monetary policy.
As a result, the GBP / USD has recovered from about half of the trading hours recorded in US trading hours on Tuesday, although it now resists around 1.3850 resistance to a trend line that was once supportive but may now act as resistance.
GBP / USD price chart, one hour schedule (September 3 – 15, 2021)
Source: IG (click for larger image)
Next week is Friday’s UK retail sales data, which is expected to show 2.7% annual growth in August. However, given employment and inflation, there is a risk that the number will exceed expectations, despite continued fears of global growth, as confirmed by recent Chinese data, which showed both industrial production and retail sales below last month’s forecast.
– Written by Martin Essex, analyst
Feel free to contact me on Twitter @MartinSEssex