UK inflation rates increased from 2.7% in May, up to 2.9% in June according to the Office for National Statistics (ONS). This figure, whilst a 14 month high, was lower than the expected 3% and caused the Pound to weaken against the EUR during Tuesday morning’s trading. Whilst the UK economy does seem to be moving forward, inconsistent data along with a wide trade deficit, is continuing to hamper our recovery process.
Personally I think we are likely to see a move back through 1.15 over the coming days and i do think the Poubnd may be under pressure for the short-term. Confirmation from the Bank of England (BoE) last week that UK interest rates were likely to stay low for years to come, has knocked market confidence in the recovery of the UK eocnomy and ultimately the Pound.
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