The Pound is growing despite inflation. Overview for 14.07.2021

GBPUSD is moving upwards on Wednesday despite the statistics. 

The British Pound is rising against the USD in the middle of the trading week. The current quote for the instrument is 1.3845.

Today’s statistics showed that the CPI in the United Kingdom was 2.5% y/y in June after being 2.1% y/y the month before. Market expectations implied 2.2% y/y but the actual reading turned out to be more aggressive. The key contribution was made by second-hand cars, clothing and footwear, and eating and drinking out. On MoM, the indicator showed 0.5% after being 0.6% in May. 

The Core CPI in the United Kingdom was 2.3% y/y in June after being 2.0% y/y in the previous month. 

The PPI Input dropped 0.1% m/m in June against the expected reading of 1.1% m/m. The PPI Output added 0.4% m/m against market expectations of 0.6% m/m. it seems like manufacturers are trying to holds down prices to avoid consumer interest outflow.

The inflation boost will be another signal for the recovery of the British economy, although it is highly likely to be temporary. As soon as its key parameters reach stability, the indicator will return to the median target of 2%.

At the moment, one shouldn’t wait for any announcements from the Bank of England in this respect.