British CPI is in the arena

Consumer Price Index (CPI) is the UK’s most important inflation indicator because it’s used as the central bank’s inflation target. The pound is depreciating because of Brexit deal’s uncertainties. Although the UK hasn’t left the European Union yet, the British economy is already under great pressure. As the economy weakens, the pound goes down. To recover, the pound needs improvement in economic indicators.

Annual inflation in the UK declined to 2.4% in April 2018 from 2.5% in March, and below market expectations of 2.5%. It is the lowest rate since March 2017. Although the Bank of England’s inflation target is at 2%, a decline of CPI makes traders think that the central bank won’t raise interest rates this year. This is negative for the pound.

The UK CPI figures will be released at 11:30 MT time on June 13.

• If the data is greater than the forecast, the British pound will appreciate.

• If the data is weaker than the forecast, the British pound will go down.

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