The pound is weaker against the euro and the dollar following the latest inflation data for the UK.
Inflation rose to 9.1% in May, up slightly from April’s figure of 9% and a fresh 40-year high. While this figure is in line with expectations, some major elements of the report were softer than anticipated, potentially proving supportive of sterling.
There may also be signs that core inflation, the statistic that excludes external influences such as global fuel and commodity prices, is peaking. Core CPI came in at 5.9%, below market predictions of 6% and down from April’s figure of 6.2%.
Today’s sluggish inflation figures support the Bank of England’s plan to continue to raise interest rates by 25 basis points.
