The headline consumer price index (CPI) rose at an annual pace of 2.7% in August, as expected, after 2.8% in July. The retail price index (RPI), which is also of importance, rose by 3.3%. It was expected to rise at a pace of 3.2% after 3.1% beforehand.
GBP/USD was on the march once again, climbing up from support at around 1.5880 to 1.5925 towards the publication. GBP/USD is now sliding back down, but holding on to 1.59 so far.
Other figures: Core CPI remained at a pace of 2%, just below expectations of 2.1%. PPI Input dropped by 0.2%, contrary to expectations for a rise of 0.3%. PPI Output rose by 0.1%, below 0.2% expected.
All in all, the figures are in line with expectations and not too far from the previous month’s numbers. The drop in cable does not totally erase the gains seen earlier in the day. The pound remains resilient towards the decision on QE tapering.
Recent data in the UK was excellent, with strong growth in the second quarter, and very promising PMIs in the third one. Also unemployment continues dropping at an accelerated rate.
The pound enjoyed gains against the dollar and the euro, with 1.60 standing as a tough target for cable.
For more, see the GBP to USD forecast.