This week has seen sterling rebound against the dollar and that new found resiliency continues, with GBP/USD starting at a high of 1.153 today following the UK’s latest inflation data. Against the euro, the pound has been choppy over the past 24 hours but is in a stronger position.
Britain’s annual inflation rate unexpectedly fell to 9.9% , a gentle 0.7% lower than the 10.6% increase markets were anticipating. The August rate’s fall to single-digit levels follows the easing of fuel costs and is the largest downward contribution the UK has seen since rates reached their highest in four decades with last month’s 10.1% increase. This turn of events follows Liz Truss’s announcement of a £2,500 energy bill cap last week, which means UK households will save an average on £1,000 per year until 2024.
The next key data release comes on Friday, with the return of retail sales.
