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The pound fell heavily yesterday against the euro and the US dollar
Published: 13 Nov at 5 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Rupee Exchange Rate, Euro Crisis, UK, Economy, Inflation,
The pound fell heavily on Tuesday against both the euro and US dollar after the publication of much poorer than expected UK inflation data.
The Office for National Statistics (ONS) surprised the markets yesterday with the release of its latest UK inflation data which showed that by the Consumer Price Index (CPI) measurement of inflation, UK inflation in October fell by 0.5% from 2.7% to 2.2%.
This is substantially less than the 2.5% which market analysts had been predicting and eerily similar to last week’s inflation data from the euro zone.
Analysts at Barclays Research commented that “we think it is possible that tomorrow’s Inflation Report (IR) projections will show the CPI inflation rate hitting the 2.0% target sooner than the first quarter 2015 date envisaged in the August IR and to undershoot it in the medium-term. With price pressures softer, the inflation knock outs of the forward guidance framework now appear to be significantly less at risk than at the time of its announcement in August. This puts the MPC in a more comfortable position as it suggests that as growth picks up it is less likely to be concerned that inflation pressures will build up in the economy, even though labour market data show the unemployment rate falling faster than the MPC anticipated in August.”
Yesterday, the ONS also reported that UK house prices dropped slightly in September to 184.9 from the peak of 186.0 in September. Nevertheless, the data showed that the rate of annual UK price growth continued to increase due to positive "base effects" and that on a seasonally adjusted basis, UK house prices were unchanged between August and September of this year and that in the 12 months to September 2013, UK house prices increased by 3.8% compared to an increase of 3.7% in the 12 months to August 2013.
furthermore, the data shows that house price growth remains stable across most of the UK. Not surprisingly, house prices in London are increasing at a faster rate than the UK average.
In other news, the Organisation for Economic Cooperation and Development (OECD) reported yesterday that economic growth is set to improve in the euro zone, China and the UK but that the US, India, Brazil and Russia will continue to suffer from sluggish economic growth rates.
The Office for National Statistics (ONS) surprised the markets yesterday with the release of its latest UK inflation data which showed that by the Consumer Price Index (CPI) measurement of inflation, UK inflation in October fell by 0.5% from 2.7% to 2.2%.
This is substantially less than the 2.5% which market analysts had been predicting and eerily similar to last week’s inflation data from the euro zone.
Analysts at Barclays Research commented that “we think it is possible that tomorrow’s Inflation Report (IR) projections will show the CPI inflation rate hitting the 2.0% target sooner than the first quarter 2015 date envisaged in the August IR and to undershoot it in the medium-term. With price pressures softer, the inflation knock outs of the forward guidance framework now appear to be significantly less at risk than at the time of its announcement in August. This puts the MPC in a more comfortable position as it suggests that as growth picks up it is less likely to be concerned that inflation pressures will build up in the economy, even though labour market data show the unemployment rate falling faster than the MPC anticipated in August.”
Yesterday, the ONS also reported that UK house prices dropped slightly in September to 184.9 from the peak of 186.0 in September. Nevertheless, the data showed that the rate of annual UK price growth continued to increase due to positive "base effects" and that on a seasonally adjusted basis, UK house prices were unchanged between August and September of this year and that in the 12 months to September 2013, UK house prices increased by 3.8% compared to an increase of 3.7% in the 12 months to August 2013.
furthermore, the data shows that house price growth remains stable across most of the UK. Not surprisingly, house prices in London are increasing at a faster rate than the UK average.
In other news, the Organisation for Economic Cooperation and Development (OECD) reported yesterday that economic growth is set to improve in the euro zone, China and the UK but that the US, India, Brazil and Russia will continue to suffer from sluggish economic growth rates.
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Source: moneytransfer.co.uk