The pound has strengthened against the euro and the dollar following better-than-expected inflation figures, which were released this morning.
The consumer price inflation rate in the UK climbed to 2.1% year-on-year in May, beating expectations of 1.8%. This was the highest reading since July 2019 and reflects the reopening of the UK economy. This was fuelled mainly by clothing, motor fuel, recreational goods and eating and drinking out.
This means that inflation is now above the Bank of England’s 2% target, which is an interesting development ahead of its monetary policy meeting next week.
