The British Pound (GBP) weakens on declining inflation in the United Kingdom. BBH economists analyze the outlook for the GBP.
UK February CPI strengthens case for BoE rate cut in August
The headline CPI rose slightly less than expected, 0.6% mom (consensus: 0.7%) in February. Meanwhile, year-on-year headline and core CPI inflation slowed in February to 3.4% (the lowest since September 2021) and 4.5% (the lowest since January 2022), respectively. This figure was 0.1% lower than expected by market participants.
However, we doubt that the BoE will rush to ease its monetary policy because British service sector inflation remains high. In line with BoE forecasts, annual services CPI inflation fell to 6.1% in February (consensus: 6.0%) from 6.5% in January. Money markets have more than priced in a first BoE rate cut of 25 basis points in August.
The Pound has room to rise against the Euro.
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.
