The rate of UK inflation slowed more than forecast in April falling to a seven month low. Consumer prices rose 2.4% from a year earlier, down from 2.8% in March (the market was expecting a figure of 2.6-2.7%). The broader measure of RPI inflation fell to 2.9% from 3.3% in the previous month, the lowest since September.
Easing inflationary pressures will provide some welcome relief for the MPC and incoming new BoE governor, Mark Carney, may avoid having to start his tenure with an open letter to the Chancellor explaining why inflation is above the target's upper bound of 3.0%. Effectively the fall in inflation makes any interest rate rises less likely and in fact increases the potential for further stimulus. The combined affect of this is a less attractive pound.
This mornings release of the Bank of England minutes offered no support for a stronger pound
Japan’s exports fell short of expectations in April widening the trade deficit. Weakness in global demand limited the growth in overseas shipments to 3.8% from a year earlier. The recent slide in the value of the Yen to a four year low against the US dollar will make Japan’s exports more competitive, however, limited demand is constraining activity and impacting on government efforts to revive the economy.
GBP/USD and GBP/EUR on the bank of the UK inflation data. EUR/USD made modest gains pushing to a high of $1.2933.
Posted in Daily Market News on May 30 2014
UK consumer price inflation declined in the previous month for the first time since September. British Inflation eased to 2.4 percent in April from 2.8 percent in March, official data showed today, an improved reading from the 2.6 percent rate that economists had predicted.VIEW FULL ARTICLE
Posted in Daily Market News on May 21 2013 by alex