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GBP slips near session lows against JPY after UK CPI print
UK headline inflation accelerated to 2.9% YoY in July, while markets still expect the Bank of England to hold rates steady through the year.
The British pound edged lower against the Japanese yen, trading near its day’s low around 215.70 after UK Consumer Price Index data for July was released, according to FXStreet.
The Office for National Statistics reported headline inflation quickened to 2.9% year-on-year from 2.5% in June, while core CPI rose 2.6% year-on-year, compared with expectations that it would slow to 2.5%. On a monthly basis, headline CPI increased 0.35, matching forecasts versus the prior 0.1.
FXStreet noted that signs of re accelerating headline price pressures after June suggest UK inflation concerns remain, which could lead traders to revisit Bank of England interest rate expectations. At the same time, markets were still pricing in a policy rate held at current levels throughout the year.
In FX markets, the yen also benefited as traders appeared confident the Bank of Japan will raise rates by 25 basis points to 1.25% at the September meeting. Looking ahead, investors are set to focus on Japan National CPI and UK Retail Sales data for July scheduled for Friday.