GBP/USD PRICE, ANALYSIS, AND CHARTS
- UK CPI fell to 3.4%, beating expectations.
- Fed rate decision, new dot plot, and press conference now key
Most Read: British Pound Wilts as Markets Await Both Fed and BoE
According to the latest Office for National Statistics data, UK inflation fell faster than expected in February, pushed lower by falling food prices. Headline inflation fell to 3.4%, down from 4% in January and marginally lower than market forecasts of 3.5%, while core inflation fell to 4.5%, down from 5.1% and a fraction below market estimates of 4.6%. Good news for the Bank of England as it continues to bring price pressures down to 2%.
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The Bank of England is fully expected to leave interest rates untouched tomorrow at its latest MPC meeting, although today’s data will encourage the more dovish BoE members to press harder for a rate cut. Financial markets are fully pricing in the first move in the UK Bank Rate at the August meeting, although the probabilities of a cut at the June meeting have risen slightly post-inflation data to around 50%.
