Breaking: GBP/USD rises towards 1.3650 as UK annualized CPI beats estimates with 5.4% in Dec
- UK CPI rises by 5.4% YoY in December vs. +5.2% expected.
- Monthly UK CPI arrives at +0.5% in December vs. +0.3% expected.
- GBP/USD edges higher above 1.3600 upbeat UK CPIs.
The UK Consumer Prices Index (CPI) 12-month rate came in at 5.4% in December when compared to +5.1% registered in November while beating expectations of a +5.2% print, the UK Office for National Statistics (ONS) reported on Wednesday.
Meanwhile, the core inflation gauge (excluding volatile food and energy items) rose by 4.2% YoY last month versus +4.0% booked in November, outpacing the consensus forecast of +3.9%.
The monthly figures showed that the UK consumer prices arrived at +0.5% in December vs. +0.3% expectations and +0.7% prior.
Main points (via ONS):
“The largest upward contributions to the December 2021 CPIH 12-month inflation rate came from housing and household services (1.31 percentage points) and transport (1.29 percentage points, principally from motor fuels and second-hand cars).”
“The largest upward contributions to the change in the CPIH 12-month inflation rate between November and December 2021 came from food and non-alcoholic beverages, restaurants and hotels, furniture and household goods, and clothing and footwear.”
“These were partially offset by large downward contributions to change from transport, and recreation and culture.”
GBP/USD reaction
In an initial reaction to the upbeat UK CPI numbers, the GBP/USD pair ticked a few pips higher to clinch fresh daily highs of 1.3617 before reversing quickly to pre-data release levels of around 1.3605. The spot is up 0.08% on the day.
GBP/USD technical levels
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FXStreet
