{"id":816062,"date":"2026-07-22T07:32:10","date_gmt":"2026-07-22T07:32:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/816062\/"},"modified":"2026-07-22T07:32:10","modified_gmt":"2026-07-22T07:32:10","slug":"british-pound-remains-depressed-against-us-dollar-following-soft-uk-inflation-data","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/816062\/","title":{"rendered":"British Pound remains depressed against US Dollar following soft UK inflation data"},"content":{"rendered":"

The British Pound<\/a> (GBP) consolidates losses against the US Dollar (USD) on Wednesday, as a string of UK inflation<\/a> figures provided some leeway for the Bank of England to maintain its \u201cwait-and-see\u201d stance through the coming months. The GBP\/USD pair remains pinned near weekly lows, below 1.3400 following a nearly 1.2% decline in the last four days.<\/p>\n

Data released by the UK National Statistics Office on Wednesday revealed that the Consumer Price Index (CPI) moderated to a 2.6% year-over-year (Y-o-Y)\u00a0 growth in June, from 2.8% in May, below the 2.7% forecasted by market analysts. The Core CPI, however, remained steady at 2.6% against expectations of a 2.5% reading.<\/p>\n

Beyond that, the Input Producer Price Index (PPI) contracted 2% on the month, its sharpest decline in more than six years, while the Output PPI remained flat, undershooting expectations of a 0.4% advance. Year on year, input PPI eased to 7.3% from 9.3% while the Output PPI slowed down to 3.5% in June from 3.7% in May.<\/p>\n

In the US, the calendar has been thin this week<\/a>, but the US Dollar maintains a bid tone, buoyed by market concerns about the war in the Middle East and higher US Treasury yields. The US military pounded targets in Iran for the 11th consecutive day on Wednesday, and US President Donald Trump threatened to attack nuclear facilities, which, according to Tehran, would expand the war in the region.<\/p>\n

UK Pound slides amid PM Burnham\u2019s early fiscal signals<\/p>\n

Rabobank\u2019s FX team notes that \u201cUK markets have now had a few hours to react to PM Burnham\u2019s new cabinet, many of whom have been involved in UK politics for years,\u201d and the initial response has been cautious. They highlight that \u201c10-year gilt yields are currently above the 5% level, which is a sign of some anxiety,\u201d while \u201cthe Pound is the worst performing G10 currency on a 1-day view,\u201d underscoring investor unease around the new administration\u2019s fiscal direction.<\/p>\n

In the near term, Rabobank points out that \u201cBurnham has promised measures to ease cost-of-living pressures,\u201d with the policy push already underway. \u201cHe kicked this off this morning with the news<\/a> that VAT on household electricity bills will be cut from October,\u201d the bank observes, adding that \u201cthe market is now bracing itself for a list of further announcements\u201d as investors assess how these initiatives will be funded and what they might mean for UK assets.<\/p>\n

Economic Indicator<\/p>\n

Consumer Price Index (YoY)<\/p>\n

The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics<\/a> on a monthly basis, is a measure of consumer price inflation \u2013 the rate at which the prices of goods and services bought by households rise or fall \u2013 produced to international standards. It is the inflation measure used in the government\u2019s target. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.<\/p>\n

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Read more.
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Economic Indicator<\/p>\n

Consumer Price Index (MoM)<\/p>\n

The United Kingdom (UK) Consumer Price Index (CPI), released by the Office for National Statistics<\/a> on a monthly basis, is a measure of consumer price inflation \u2013 the rate at which the prices of goods and services bought by households rise or fall \u2013 produced to international standards. It is also the inflation measure used in the government\u2019s target. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.<\/p>\n

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Read more.
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