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GBPUSD Rises As UK Inflation Ticks Higher

James Boston
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GBPUSD Rises As UK Inflation Ticks Higher

The UK has experienced a marginal pick up in it’s rate of inflation according to the latest data published this morning by the National Statistics Office. October numbers are showing that the Consumer Price Index (CPI) has ticked up a point to read at 1.3% year on year compared to the 1.2% reading taken in September, the consensus estimate fully captured this rise to 1.3%. The month on month number came in at 0.1% as expected, this represents a moderate rise from the previous month’s flat 0.0% reading. The Core CPI reading has however not moved this month, this continues to read at 1.5% despite an expectation for a pick up to 1.6%.

Notwithstanding the gradual increase in the rate of the general price growth in the UK, the retail sector has undergone a slight fall in prices. The Retail Price Index (RPI) is now at a flat 0.0% month on month, this is down two points from September’s 0.2% growth and represents a greater fall than anticipated, consensus was for a reading of 0.1%. The year on year RPI has however managed to hold steady at 2.3% as was generally anticipated. Competition in the retail sector has lead to a certain amount of discounting ahead of the holiday period, Retail Sales are expected to be strong over this period and this is likely to place some upward pressure on prices over the next couple of months.

One aspect of Britain’s economy that is still steadily growing is the property sector. The latest DCLG House Price Index has clearly expanded on the month, the year on year measure is now showing a growth in house prices of 12.1% for the 12 month period, although this was largely anticipated it does represent a marked increase from the 11.7% recorded in September.

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