Euro Edges Higher Against Pound as Inflation Data Meets Expectations
The Euro (EUR) gained against the British Pound (GBP) after UK Consumer Prices Index (CPI) data was released, showing inflation rose in line with market expectations. The EUR/GBP pair jumped to session highs above 0.8570, extending its recovery from lows near 0.8550 on Tuesday.
UK CPI data revealed that consumer prices accelerated to a 3.1% year-on-year rate in August, up from 2.9% in July, while core CPI grew 2.6% over the same period, unchanged from the previous month.
Producer prices beat forecasts, with the input Producer Price Index (PPI) accelerating to 6.1% year-over-year and the Output PPI rising to 3.7% Y-o-Y, both exceeding market expectations.
Despite this, the Bank of England is still expected to keep interest rates steady on Thursday, as recent comments from Governor Bailey have dampened hopes for an immediate rate hike.