Strong Inflation Data Fail to Boost Sterling’s Rise

It is not a good day for bulls who trade the GBP/USD pair. The British currency loses ground against its American counterpart despite the strong inflation report from the United Kingdom. The UK’s inflation rate hit the highset level in 5 and half years in September in annual terms. The consumer prices grew by 3% as expected. This is an obvious sign that it is the right time for the British central bank to take measures and lift the interest rate. Nevertheless, the pound sterling extends its losses, indicating that market participants think differently.

Mr, Carney allowed for a possibility of tightening the monetary policy of the Bank of England, but he also spoke about factors that influence the economic stability. The Brexit issue is no longer very sensitive. Some experts think that the negotiations on the UK’s exit from the European Union may fail as the terms of staying in the common market are not agreed yet. In December, the European Union will hold a summit where the subject of the second round the Brexit negotiations will be discussed.

It creates certain uncertainty on the market, so the authorities of the Bank of England prefer to be cautious regarding any changes of the monetary policy. The demand for the British currency is likely to be subdued for a long time.

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