FX.co ★ British Pound Strengthens After CPI

The British pound approached $1.35, maintaining its position near the highest levels witnessed since 2022. This strength continues to be fueled by a generally weaker US dollar and the latest UK inflation figures, which indicate that price pressures remain high. The annual inflation rate registered at 3.4% in May, aligning with forecasts and slightly below April's rate of 3.5%. It is worth noting that the April rate would have stood at 3.4% if not for a miscalculation in the Vehicle Excise Duty series. These figures have solidified market predictions that the Bank of England will likely hold interest rates steady at their upcoming meeting this Thursday. However, there remains a possibility for a 25 basis point rate cut in August.