- UK CPI rises 8.7% YoY in April vs. 8.2% expected.
- Monthly UK CPI arrives at 1.2% in April vs. 0.8% expected.
- GBP/USD rises above 1.2450 on upbeat UK CPIs.
According to the latest data published by the UK Office for National Statistics (ONS) on Wednesday, the United Kingdom annual Consumer Price Index (CPI) rose 8.7% in April against the 10.1% jump recorded in March. The market consensus was for an 8.2% increase.
Meanwhile, the Core CPI gauge (excluding volatile food and energy items) increased 6.8% YoY last month, compared with a 6.2% rise seen in March while beating expectations of a 6.2% clip.
The monthly figures showed that the UK Consumer Price Index climbed 1.2% in March vs. 0.8% estimates and 0.8% previous.
The UK Retail Price Index for April accelerated 1.5% MoM and 11.4% YoY, beating expectations across the time horizon.
An official from the UK Finance Minister Jeremy Hunt’s office said that “we must stick resolutely to plan to get inflation down.”
Meanwhile, Hunt noted, “although it is positive that it is now in single digits, food prices are still rising too fast.”
Additional takeaways (via ONS)
UK core CPI rate highest since March 1992.
Food and non-alcoholic drink inflation eased slightly to 19.1% from 19.2%.
FX implications
In an initial reaction to the UK CPI numbers, the GBP/USD pair jumped nearly 20 pips to hit daily highs at 1.2466 before reversing slightly to 1.2455, where it now wavers. The pair is up 0.32% on the day.
GBP/USD: 15-minutes chart
Why does UK inflation matter to traders?
The Bank of England (BOE) is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase in interest rates or the reduction of bond buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Pepe price forecast: Eyes for 30% rally
Pepe’s price broke and closed above the descending trendline on Thursday, eyeing for a rally. On-chain data hints at a bullish move as PEPE’s dormant wallets are active, and the long-to-short ratio is above one.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.