GBP climbed high. Overview for 14.12.2022

The GBP grew significantly against the USD. The current quote is 1.2340.

This surge of optimism was solely thanks to the weakness of the USD.

According to the statistics for today, the CPI in Britain in November dropped to 10.7% y/y. The previous result was 11.1%, which was the high since 1981. The forecast had been 10.9%. Base inflation dropped to 6.3% y/y from 6.5% a month before.

The retail price index also stepped back - to 14.0% from 14.2% previously. Even remembering the upcoming correction, these results are impressive.

A certain decline in the inflation pressure will push the Bank of England gradually towards the interest rate above current levels. There is no hurry any more but actions must be consistent, otherwise the inflation rally will return.

The BoE will have its meeting tomorrow. The interest rate is likely to grow by 50 base points.