The increase in inflation in the United Kingdom services in April was mainly due to a temporary increase in air rates and package holidays caused by Easter, an effect that should fade soon, says Francesco Pesole, an Ing currency analyst.
EUR/GBP can be below 0.840 in the short term
“Other key areas such as restaurants, medical care and rentals are showing signs of disinflation. While the rent continues to hold the general figure, its impact is intended to decrease next year. Our opinion is that inflation in services will fall further this summer, and although the levels remain high for the Bank of England, a rate cut in August still seems possible.”
“The markets have reduced flexibility bets only in a modest way, and a movement in August is still valued by approximately 50%. As a consequence, there has not been much support for the pound from the publication of the CPI, and the EUR/GBP is probably finding support in the instability of the borrowed market of the US.”
“We still like the possibilities that the EUR/GBP is below 0.840, although quieter asset markets are probably a necessary condition.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
