According to the Office for National Statistics in the UK, the Consumer Price Index (CPI) y/y, which serves as an indicator of inflation, has fallen to 10.1% from its previous reading of 10.4%.
.png "UK Inflation Rate")
Figure 1: UK Inflation Rate, Tradingeconomics.com
Following the CPI release, the British pound increased in value. As a result, the GBP/USD pair witnessed a significant increase reaching a high of $1.24430 (Figure 2).
.png "GBP/USD M30 chart")
Figure 2: GBP/USD M30, TradingView.com
This movement was reflecting the reading that came higher than the expected 9.8 % level, which shows that inflation did ease slightly but it is still strong, and this could still encourage the Bank of England to continue with its hawkish rate hikes to battle inflation.
.png "UK Interest Rate")
Figure 3: UK Interest Rate, Tradingeconomics.com
According to Figure 3, it illustrates a consistent upward trend in interest rates in the UK. However, how far can the Bank of England maintain this current pace of rate hikes?
The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.