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Pound Climbs as UK Inflation Data Suggests Slower Bank of England Rate Cuts

Posted on April 18, 2024
Writer: James Miller

Sterling climbed to a one-month high against the euro and strengthened against a somewhat weaker dollar on Wednesday, fueled by the latest UK inflation data, which suggests the Bank of England might slow down its rate cuts.

The inflation rate in Britain eased to 3.2% in March, a slight decrease from February’s 3.4%, marking the lowest rate in two and a half years. Despite this, persistent services inflation suggests the Bank of England might adopt a cautious approach to further monetary easing.

Market expectations have shifted, with a rate adjustment by the Bank of England now fully anticipated by September, ahead of similar moves expected from the European Central Bank and the Federal Reserve later in the year. 

The UK’s tight labor market and recent energy price shocks are significant factors influencing these forecasts. 

Additionally, the upcoming national election, with projections of a defeat for the Conservative Party, adds to the economic uncertainty, although the immediate impact on the markets is predicted to be limited.

If you want to find out more, read the full article on Reuters.


James Miller

James Miller is a Senior Content Writer at McGruff.com. He has a background in investing and has spent most of his career in the financial industry. He can trace his family tree back to the California Gold Rush when his ancestors risked it all to make it big in the west. He feels like he's following in their footsteps as he strives to make sense of today's gold market.

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