GBP/USD
The British pound fell sharply to below $1.3, the lowest since August 19th, after inflation in the UK fell more than expected, bolstering the case for additional rate cuts by the Bank of England.
Annual inflation rate slowed to 1.7%, the lowest since April 2021 and below forecasts of 1.9%. Core inflation dropped to 3.2% from 3.6% and the services inflation fell to 4.9%, the lowest since May 2022.
Meanwhile, wage growth continued to slow and hit a fresh tow-year low, indicating easing pay pressures in the economy. Investors are now anticipating a 45bps rate cut by the BoE by year-end, up from 37bps before the inflation report.
The central bank is expected to lower borrowing costs by 25bps next month. Additionally, attention is on the 2025 Budget announcement for insights on government policies and taxes.
The pound's decline has been influenced by a stronger dollar, as the Federal Reserve is projected to ease borrowing rates at a slower pace than previously anticipated. (Cay)
Source: Trading economi
