• The EUR/GBP currency pair continues to decline as a result of the UK inflation figures surpassing expectations.
  • The Eurozone‘s moderate GDP numbers have failed to alleviate the Euro’s weakness.
  • Traders are eagerly anticipating the UK Retail Sales data, as it may provide valuable insights into the Bank of England‘s upcoming interest rate decision.

EUR/GBP continues to experience losses, trading near the monthly low at 0.8540 during the Asian session on Thursday. The EUR/GBP downward trajectory is further driven by better-than-expected inflation figures from the United Kingdom (UK) on Wednesday.

The latest economic indicators in the UK have heightened concerns about the possibility of the Bank of England (BoE) implementing additional interest rate hikes in its September meeting. Notably, the July UK Consumer Price Index (CPI) showed a monthly decrease of 0.4%, which was slightly below the projected decline of 0.5% and followed a 0.1% increase in June. On an annual basis, the CPI came in at 6.8%, in line with expectations and representing a slight decrease from the previous reading of 7.9%.

Furthermore, the Core CPI, which excludes volatile items, remained steady at 6.9%, broadly aligning with the anticipated rate of 6.8%. These figures suggest that while inflation in the UK remains elevated, there has been a marginal moderation compared to previous periods. The outcome of these inflation numbers is likely to influence the BoE’s decision on future interest rate adjustments.

The Eurozone released moderate economic data on Wednesday. GDP growth remained steady at 0.3% on a quarterly basis and 0.6% on an annual basis. Employment increased by 0.2% on a quarterly basis in Q2. However, the data did not help the Euro strengthen against the Pound Sterling.


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