EUR/GBP remains depressed below 0.8700 after hot UK CPI figures
- EUR/GBP extends losses for the second consecutive day and trades below 0.8700.
- UK consumer price figures confirm the inflationary impact of the US-Iran war.
- In the Eurozone, ECB speakers, including President Lagarde, will grab some attention later in the day.
The Euro (EUR) is heading south for the second consecutive day against the British Pound (GBP) on Wednesday, trading near session lows below 0.8700, as UK inflation figures put pressure on the Bank of England to bring the possibility of an interest rate hike back to the table.
Data released by the Office for National Statistics earlier on Wednesday showed that the UK Consumer Prices Index (CPI) accelerated to a 3.3% year-on-year (YoY) rate in March. These figures follow two consecutive months of prices growing steadily by 3% YoY, and highlight the inflationary impact of the Middle East war.
The monthly CPI accelerated by 0.7%, its highest level in almost one year, beating expectations of a 0.6% increase, and following a 0.4% gain in February.
Likewise, producer and retail prices have increased beyond forecasts. The Input Producer Prices Index (PPI) surged 4.4% in March and 5.4% year on year. Retail prices rose 0.8% from February and 4.1% over the last 12 months, both above market expectations of 0.7% and 3.9%, respectively.
The Bank of England (BoE) meets on April 30 and is widely expected to keep interest rates unchanged. The upside risks to inflation, however, are likely to give hawkish committee members grounds to call for some monetary tightening down the road.
In the Eurozone, the focus on Wednesday will be on a slew of European Central Bank (ECB) speakers, including President Christine Lagarde, later in the day. The ECB is also expected to keep its monetary policy on hold at its April meeting, and therefore, they are likely to stick to the mantra of waiting for further economic data.
Economic Indicator
Consumer Price Index (YoY)
The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics on a monthly basis, is a measure of consumer price inflation – the rate at which the prices of goods and services bought by households rise or fall – produced to international standards. It is the inflation measure used in the government’s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Wed Apr 22, 2026 06:00
Frequency: Monthly
Actual: 3.3%
Consensus: 3.3%
Previous: 3%
Source: Office for National Statistics
The Bank of England 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 of 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.
Economic Indicator
Producer Price Index - Input (YoY) n.s.a
The Producer Price Index Input released by the National Statistics is a monthly measurement of the rate of inflation experienced by the UK manufactures when buying goods and services. It captures changes in the average price of a fixed basket of goods and services purchased by the UK Manufactures. A high reading is positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).
Read more.Last release: Wed Apr 22, 2026 06:00
Frequency: Monthly
Actual: 5.4%
Consensus: -
Previous: 0.5%
Source: Office for National Statistics
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
