The pound sterling rose in the European market on Wednesday against a basket of global currencies, rebounding strongly from its lowest level in four weeks against the US dollar recorded yesterday, on its way to achieving its first gain in the last three days, after strong inflation data in the United Kingdom.
This data reinforced the possibility that the Bank of England will raise British interest rates during next month's meeting to confront entrenched inflation in the country, with increasing speculation about the continuation of the monetary tightening cycle and the presence of another increase in interest rates during the July meeting.
British pound exchange rate today
The pound rose against the dollar by 0.5% to $1.2470, from the opening price of trading at $1.2412, and recorded the lowest level today at $1.2411.
The pound sterling ended yesterday's trading, down by 0.2% against the US dollar, in the second consecutive daily loss, recording a four-week low at $1.2373, due to the strong performance of the US currency, and weak data on the main constituent sectors of the British economy during May.
British inflation data
The United Kingdom's Office for National Statistics announced on Wednesday morning that the overall consumer price index rose by 8.7% annually in April, exceeding market expectations for a rise of 8.2%, and the index rose by 10.1% in March.
Core CPI rose by 6.8% in April, above expectations for a rise of 6.2%, higher than the previous reading of 6.2% in March.
Bank of England
The above data showed that inflationary pressures are still strong on monetary policy makers at the Bank of England, and that there is a need for additional increases in British interest rates after the likely increase of 25 basis points next month.
Bank of England Governor Andrew Bailey said recently that more hikes in British interest rates may be needed if there are signs of continued inflationary pressure.
British interest
Pricing is now complete in the markets about the possibility of the Bank of England raising British interest rates at a rate of 25 basis points on June 22, with a total of 50 basis points before reaching the top of the interest curve, which means that there will be another increase at a rate of 25 basis points at the July meeting. July.
Expectations
Lloyds Bank expert Han Joo said that the pound found support this morning after strong inflation data in the United Kingdom, which raised market expectations of another hike in interest rates for the Bank of England next month.
There is little good news in the released CPI data, which will likely leave the Bank of England with little to no interest, said Neil Pearl, chief investment officer at Premier Merton Investors, Neil Pearl. There is no choice but to keep interest rates rising at the next meeting.
