- The National Statistics Office of the United Kingdom will publish the June CPI data on Wednesday.
- Inflation is expected to be measured by the CPI, stay above the target of the BOE in June.
- The GBP/USD torque is directed towards the publication with a firmly bassist tone
The June Consumer Price (CPI) index of the United Kingdom is scheduled for publication on Wednesday at 06:00 GMT. The report, published by the National Statistics Office (ONS), is followed closely due to the possible impact of inflation data on monetary policy decisions of the Bank of England (BOE).
Inflation is expected to be in the United Kingdom, measured by the CPI, has increased 0.2% in monthly terms, matching May reading. The annual figure is expected to be 3.4%, also without changes with respect to its previous reading. Finally, it is forecast that the annual underlying IPC registers 3.5% after a similar reading in the previous month.
What to expect from the next inflation report of the United Kingdom?
After reaching a peak of 11.1% in the late 2022, the annual inflation of the United Kingdom was reduced to 1.7% in September 2024, below the 2% target of the BOE. Interest rate cuts began in August 2024, since those responsible for politics were cautiously optimistic that things would be resolved slowly but constantly. Then, Donald Trump won the elections in the United States and brought their protectionist policies and tariffs. The world believes that its measures will probably relive inflationary pressures; Therefore, most of the main central banks decided to soften the flexibility cycles, adopting a much more cautious approach.
The Bank of England cut the interest rates at 4.25% on May 8 and decided to maintain the stable reference rate when it met on June 19. At that time, six of the nine members of the BOE monetary policy committee chose to keep the fees, while three opted for a 25 basic points cut (BPS). “Global uncertainty remains high,” said officials, adding that monetary policy does not follow a pre -established path. The next meeting will take place on August 7.
Meanwhile, softer figures in advance weigh on sterling pound. The unexpected contraction of the Gross Domestic Product (GDP) announced at the beginning of this month fed concerns about local economic health.
The Central Bank would be forced to cut rates to help growth, but fears related to inflation will force officials to keep waiting.
According to Scotiabank, by analyzing the GBP/USD TAL, “there have not been large data publications and market participants are waiting for the publication of the IPC on Wednesday as the next great event risk. The publication is unlikely to change the expectations for the BOE, where the markets are valuing a 25 BPS cut at the next meeting of August 7. The recent communication of the BOE has been moderate related to the labor market. “
How will the United Kingdom consumer price index affect the GBP/USD?
Taking all this into account, softer figures of the anticipated should increase the chances of an upcoming rate cut, while increasing inflationary pressures will force a more aggressive posture of the BOE.
Before the announcement, the GBP/USD torque presses the level of 1,3400, with the resurgent demand of the US dollar (USD) combining with the weakness of the GBP.
Valeria Bednarik, chief analyst of FXSTERET, points out: “The GBP/USD torque is survey in the short term, but there are no technical signs that it will change course. The pair has immediate support in the area of 1,3370, where it touched background in June, and a break below this level would open the door to a more pronounced fall towards the level of 1,3300. Additional IPC of the United Kingdom, but possible by a risk -related catalyst. “
Bednarik adds: “The first line of vendors, in case of a recovery, is located at 1,3475. An advance beyond this area exposes the 1,3520 region, with profits beyond the latter probably in case of renewed weakness of the US dollar.”
Finally, Bednarik states: “A constant advance beyond the level of 1,3400 should favor a route beyond the maximum of the year and towards the 1,3500 area, while additional profits expose the price zone of 1,3560, where the GBP/USD reached its maximum point in September 2022.”
Inflation – Frequently Questions
Inflation measures the rise in prices of a representative basket of goods and services. General inflation is often expressed as an intermennsual and interannual percentage variation. The underlying inflation excludes more volatile elements, such as food and fuel, which can fluctuate due to geopolitical and seasonal factors. The underlying inflation is the figure on which economists focus and is the objective level of central banks, which have the mandate of maintaining inflation at a manageable level, usually around 2%.
The consumer price index (CPI) measures the variation in the prices of a basket of goods and services over a period of time. It is usually expressed as an intermennsual and interannual variation. The underlying IPC is the objective of the central banks, since it excludes the volatility of food and fuels. When the underlying IPC exceeds 2%, interest rates usually rise, and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually translates into a stronger currency. The opposite occurs when inflation falls.
Although it may seem contrary to intuition, high inflation in a country highlights the value of its currency and vice versa in the case of lower inflation. This is because the Central Bank will normally raise interest rates to combat the greatest inflation, which attracts more world capital tickets of investors looking for a lucrative place to park their money.
Formerly, gold was the asset that investors resorted to high inflation because it preserved their value, and although investors often continue to buy gold due to their refuge properties in times of extreme agitation in the markets, this is not the case most of the time. This is because when inflation is high, central banks upload interest rates to combat it. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in front of an asset that earns interest or place money in a cash deposit account. On the contrary, lower inflation tends to be positive for gold, since it reduces interest rates, making bright metal a more viable investment alternative.
Economic indicator
Consumer Price Index (MOM)
The IPC publishes it National Statistics and measures prices a basket of goods and services bought by households for consumption. The CPI is the main indicator to measure inflation and changes in consumption trends. A greater result than expectations is bullish for the pound, while a minor reading is bassist.
Read more.
Next publication:
LIE Jul 16, 2025 06:00
Frequency:
Monthly
Dear:
0.2%
Previous:
0.2%
Fountain:
Office for National Statistics
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.
