UK inflation figures for October were weaker-than-forecasted. However, core inflation remained elevated at 5.7% vs. 6.1% in September.
On Wednesday, UK inflation figures for October garnered investor interest. The wage growth figures for Q3 aligned with Bank of England Governor Andrew Bailey’s view that interest rate cut discussions are premature.
However, the UK annual inflation rate softened from 6.7% to 4.6% in October. Core inflation eased from 6.1% to 5.7%. Economists forecast inflation rates of 4.8% and 5.8%, respectively.
According to the Office for National Statistics,
The softer inflation figures may give the Bank of England reason to begin discussing interest rate cuts.
Before the UK inflation figures, the GBP/USD rose to a high of $1.24994 before falling to a low of $1.24789.
However, in response to the numbers, the GBP/USD rose to a high of $1.24949 before falling to a low of $1.24662.
This morning, the GBP/USD was down 0.24% to $1.24687.
Bank of England Monetary Policy Committee member Jonathan Haskel is on the calendar to speak on Wednesday. Investors must consider views on wage growth, inflation, and monetary policy.
Later in the Wednesday session, US economic indicators will draw investor interest.
US retail sales and producer price numbers for October will be in focus. After the market reaction to the US CPI Report, sensitivity to the numbers will likely intensify.
However, investors must also monitor Fed speeches. FOMC member Michael Barr is on the calendar to speak. Reaction to recent US Reports will influence the appetite for the US dollar.
With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.