The Great Britain pound strengthened against most its major peers after the report showed that the consumer prices in the UK increased more than forecast last month.
The government report showed that the annual inflation in Britain was 4.4 percent in July, up from 4.2 percent in June. Median forecast was a 4.3 percent growth. Bank of England Governor Mervyn King in his letter to George Osborne, Chancellor of the Exchequer, expressed his opinion that the inflation will slowly fall below the bank’s target of 2 percent as the slowdown of economic growth will remove inflation pressure.
The sterling also rose against the euro after French President Nicolas Sarkozy and German Chancellor Angela Merkel rejected the plans for issuing joint European bonds. Merkel said:
I donât think Europe has used its last resource yet, and I donât think we can resolve the problem with a single
Today, GBP/USD advanced from 1.6388 to 1.6464 after falling to 1.6322 and GBP/JPY rose from 125.87 to 126.34, following the drop to the daily low of 125.27, as of 19:37 GMT. EUR/GBP slumped from 0.8812 to 0.8748, erasing yesterday’s gains.
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