The British pound maintained strong gains as the currency pair was seen trading above $1.3300. The gains came after the monthly inflation data showed a strong increase overall. Headline consumer prices accelerated 2.9%, rising sharply from 2.6% the month before and beating estimates of 2.8% increase. The core CPI also increased sharply, rising 2.7% on the month. PPI input and output prices also increased significantly suggesting that inflation in the coming months will continue to rise further.
Looking ahead, the economic data today will see the UK’s labor market statistics. The average earnings will be the main focus with economists forecasting an increase in wages by 2.3%. However, with yesterday’s inflation rising faster than expected, wage growth continues to lag. Elsewhere, in the US trading session, the monthly producer prices data will be released today. Overall, the data is expected to show that inflation at factory gate might have increased in August, following a modest decline the month before.
