The Pound Sterling came under sell pressure after the latest fundamental news showed UK inflation falling more than had been expected last month. Combined with Tuesday's upbeat wage growth figures, the figures suggest to economists that British consumers are finally getting some relief. According to the Office of National Statistics, September CPI was recorded at 2.4% against predictions of a rise to 2.6%; that news helped to further weaken the Pound, already softer on reports that Britain would not be pursuing an extension to the Brexit transition period.
As reported at 11:53 am (BST) in London, the GBP/USD was trading lower at $1.3135, down 0.35%; the pair earlier hit a trough of $1.3112 while the peak was recorded at $1.3193. The EUR/GBP is trading at 0.87958 Pence, up 0.19%; the pair has ranged from 0.87679 Pence to 0.88088 Pence.
Wage Growth Key to Rate Hikes
Yesterday's news on improved wage growth could lead to the Bank of England raising rates quicker, according to some economists. The central bank had said that it would need to see indications that improved wage growth was feeding through to inflation before it would consider a tighter monetary policy. One economist believes that if the momentum can be maintained with wage growth, a shift upward in the BoE rate structure will naturally follow. Currently, markets are pricing in the next rate hike for late 2019.