GBPUSD is trading upwards on Tuesday; The Pound is strengthening against the weak USD.
The British Pound effectively benefits from another wave of the USD weakness. The current quote for the instrument is 1.4177.
When speaking earlier this week, the Bank of England Governor Andrew Bailey said that he wasn’t expecting any long-term consequences from a predicted inflation boost because the country’s economy was finally emerging from crisis.
We remind you that the CPI showed 1.5% in April after being 0.7% in March following a surge in oil prices, increased bills for households, including electricity bills if compared with the price from a year ago.
The Bank of England believes that the April surge in inflation was temporary, that’s why it should influence global inflation in the mid/long term. According to the regulator’s expectations, the CPI may increase up to 2.5% by the end of 2021, while its target is 2%. However, after that, the indicator is expected to start falling slowly.
It was also said earlier that inflation was boosting due to the pressure in the entire supply chain – the United Kingdom still has problems with it.
Later today, the United Kingdom is scheduled to report on the CBI Realized Sales, which is expected to improve in May but the Pound is very unlikely to respond to this report. The key trigger why the national currency is rising is still the weak USD.