Inflation data for the month of February, released earlier today by the United Kingdom Office for National Statistics printed lower than expectations. Consumer prices increased at a slower rate of 0.20% on the monthly headline while rising 0.30% yearly, falling below forecasts of 0.40% for both metrics. The British Pound slipped on the inflation data and on news of explosions in the Brussels airport and metro.
GBPJPY is down -0.75% at the time of writing, as GBP is sold off in favor of safe haven assets.
The Pound recently came under pressure as the ruling Conservative party continues to see members divided on the issue of a Brexit, with one minister resigning from his post. The Pound fell to a 13-day low against the Yen, testing 158.945 before managing a small recovery. Last week the Bank of England left interest rates unchanged at 0.50% with a unanimous vote, but news that interest rates were more likely to increase than be cut sent the Pound higher. British wages have also seen an increase as the average hourly earnings increased 2.10% over the prior month’s 1.90%, perhaps giving impetus to the recent hawkishness.
UK Inflation – Less Than Expected
Andamento del mercato - 22/03/2016