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GBP/USD holds near 1.3650 after UK inflation edges higher

The latest UK inflation reading showed headline CPI rising to 2.9% year over year, with household energy price cap effects accounting for most of the acceleration.

Reported · Written up by our desk · Major Pairs

GBP/USD traded just below 1.3650 late in the session, up 0.2% on the day and at its highest level in more than four months, according to FXStreet.

UK inflation data landed with July headline CPI at 2.9% year over year versus 2.6% in June, while the monthly rate rose to 0.3% and core inflation held at 2.6%, matching consensus, the outlet said.

FXStreet noted the bulk of the headline acceleration traced to the household energy price cap, which was lifted 13% at the start of July, with a further increase scheduled for October. Services inflation eased to 3.4% from 3.6%.

The British central bank held its policy rate at 3.75% on July 30, and FXStreet said upcoming BOE pricing for any increase before year end is around 30%, while surveyed economists largely expect no change this year. The outlet added that US data including initial jobless claims, at 206K versus 210K expected, did not support a weak-dollar narrative for the pair.

Latest closeGBP/USD 1.354 ▲0.3%

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