Pound Sterling hits three-year high against US Dollar on hot UK CPI data
The Pound Sterling (GBP) trades close to a fresh three-year high around 1.3470 against the US Dollar (USD) during North trading hours on Wednesday, posted earlier in the day. The GBP/USD pair advances on the release of the hotter-than-expected United Kingdom (UK) Consumer Price Index (CPI) data for April.
As measured by the CPI, the UK headline inflation rose at a robust pace of 3.5% on year, compared to estimates of 3.3% and the March reading of 2.6%. This is the highest level seen since November 2023. In the same period, the core CPI – which excludes volatile components of food, energy, alcohol, and tobacco – grew by 3.8%, faster than expectations of 3.6% and the prior release of 3.4%. Month-on-month headline inflation rose strongly by 1.2%, compared to estimates of 1.1% and the former reading of 0.3%.
The UK Office for National Statistics (ONS) reported a notable increase in prices of housing and household services, transportation, and recreation and culture, which led to a sharp surge in inflationary pressures, a major trigger that will discourage the Bank of England (BoE) from supporting an expansionary monetary policy stance further.
Source: Fxstreet
