UK headline CPI climbed to 3.5% in September, prompting Danske Bank to forecast a November BoE rate hike to restore inflation-targeting credibility.
The British pound is positioned for potential appreciation against the US dollar following the release of September inflation data showing headline CPI at 3.5%. Danske Bank analysts indicate that because core and services inflation have exceeded Bank of England projections, a rate hike in November is now the base case scenario to maintain policy credibility.
The bank expects a hike to reinforce inflation-targeting credibility following higher-than-expected core and services inflation data.
The UK headline CPI rose to 3.5% year-on-year in September.
The British Pound strengthens against the US Dollar following September inflation data that exceeded Bank of England projections. Danske Bank analysts now anticipate a central bank rate hike in November to combat persistent core and services price pressures.
The Pound is gaining support from expectations that the Bank of England will raise interest rates in November to counter inflation that is running higher than previously projected.