The British pound surged against its major peers on Tuesday, after a new report in the United Kingdom revealed that the nationâs inflation increased more than expected in November.
The UK Office for National Statistics published its inflation figures for November earlier today, which showed that the consumer prices index rose to 1.2% in November 2016 from one year earlier. This compares to an increase to 0.9% in October, and marks the fastest rate since October 2014, when the CPI rose to 1.3%. Analysts had forecast that the rate would climb to 1.1%.
The report attributed the increase to higher clothing and fuel prices, which moved against declining air and sea fares. The office added that one of the biggest contributors to deflation pressures were prices of food and nonalcoholic beverages. Core inflation, excluding fuel, food, tobacco, and beverages, increased to 1.4% in November on a yearly basis, from 1.2% in October.
The latest forecast from the Bank of England showed that the central bank expects consumer price inflation to rise to 2.7% in 2017. The projection is mainly based on the decline that the British pound experienced against the US dollar after the UK voted to leave the European Union in June.
GBP/USD traded at 1.2724 as of 14:51 GMT on Tuesday, after touching 1.2725 at 14:38 GMT, the pairâs highest level since December 6. GBP/USD opened trading today at 1.2673.
EUR/GBP moved lower to 0.8354, after starting the day off at 0.8388. The pairâs lowest level for the day was 0.8341 at 12:27 GMT.
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