The Pound is under pressure after UK inflation slowed more than expected in June. The economists of ENG They analyze the prospects of the Pound.
Good news for inflation, bad news for the pound
Headline inflation fell to 7.9% (below consensus), rising 0.4% m/m, the slowest on record since early 2022. We know the BoE is mostly focused on services inflation, and there was good news here too: a decline from 7.4% to 7.2%, contrary to what the BoE expected.
The question now is whether this is enough to tip the balance towards a 25 basis point rise in August. We’re inclined to think so, although it’s still a hard-fought decision.
We suspect there is more room for GBP/USD to fall, especially if our expectations for some dollar support until the FOMC meeting turn out to be correct. A move towards the 1.2800 zone in the Pound seems possible even before the BoE meeting.
EUR/GBP has rallied, but we suspect markets would like a bullish Euro talk beyond the 0.8700 level, and that may not happen yet if the ECB becomes totally data dependent and the Eurozone outlook remains mediocre at best.
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.
