The Great Britain pound advanced today against its major peers as inflation slowed, hitting the target set by the central bank for the first time in more than four years and fueling optimism for economic recovery in the country.
Annual growth of the Consumer Price Index fell from 2.1 percent in November to 2.0 percent in December. This was not expected by analysts, who have thought that the gauge would stay the same.
Usually, falling inflation is not good for the currency, but not in this case. Growth of consumer prices was exceeding the Bank of England target and its slowdown is considered to be a positive thing for Britain’s economy as price pressure on consumers will be alleviated, allowing them to increase spending. Experts remain bullish on the sterling even though it was not performing very well this year.
GBP/USD was up from 1.6381 to 1.6442 and GBP/JPY jumped from 168.71 to 171.33 as of 21:43 GMT today. EUR/GBP was down from 0.8342 to 0.8317, touching the low of 0.8306 intraday.
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