The Great Britain pound fell against other major currencies today despite the slightly better-than-expected inflation print. The threat of hard Brexit remains the main detrimental factor to the sterling. Producer prices were also a negative factor, falling last month unexpectedly.
Britain’s Office for National Statistics reported that the annual inflation rate of the Consumer Price Index remained at 1.5% in November, unchanged from October. Ahead of the report, market participants were expecting a small decline to 1.4%. The core CPI was also unchanged, staying at 1.7% and matching expectations.
The Producer Price Index, on the other hand, was disappointing. The input PPI fell by 0.3% in November after declining by 1.1% in October, while economists were expecting a flat reading. The output PPI fell by 0.2% after slipping by 0.1%, while analysts had predicted an increase of 0.1%. Year-on-year, the input PPI rose by 2.3%, while the output PPI fell by 0.4%.
While the pound started the trading week strong thanks to the previous week’s election victory of the Conservative Party, the currency slid due to the news that Prime Minister Boris Johnson tries to rule out extension of the December 31, 2020, deadline for reaching a trade deal with the European Union. If no agreement is reached by that time, the United Kingdom will leave the EU without a deal. And such prospect scares investors.
GBP/USD fell from 1.3127 to 1.3080 as of 17:55 GMT today. GBP/JPY slid from 143.70 to 143.37, touching the low of 143.07 intraday. GBP/CHF declined from 1.2870 to 1.2832.
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Great Britain Pound Falls Despite Positive Inflation Print
