| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | United Kingdom | HICP, Y/Y | February | 4.0% | 3.5% | 3.4% |
| 07:00 | United Kingdom | HICP ex EFAT, Y/Y | February | 5.1% | 4.6% | 4.5% |
| 07:00 | United Kingdom | HICP, m/m | February | -0.6% | 0.7% | 0.6% |
GBP traded mixed and mostly flat against other major currencies in the European session on Wednesday as investors digested the latest data, which showed that inflation in Britain slowed more than anticipated in February, supporting the case for the Bank of England (BoE) to begin policy easing in the coming months.
The pound rose versus JPY, fell versus USD, and changed little against its other major rivals.
The Office for National Statistics (ONS) reported earlier this morning the UK’s consumer prices index (CPI) climbed 3.4% YoY in February, decelerating from 4.0% YoY the previous month. The reading was lower than economists’ forecast of 3.5% YoY and represented the lowest rate since September 2021 (3.1% YoY). Meanwhile, the core CPI, which excludes energy, food, alcohol and tobacco, jumped 4.5% YoY, easing from 5.1% YoY in January. This marked the weakest core inflation since January 2022 (4.4% YoY). Economists had expected the core CPI to rise 4.6% YoY.
Cooler-than-anticipated inflation data prompted markets to increase slightly their bets on rate decreases by the BoE. According to Reuters, markets are now pricing a nearly 63% chance that the BoE will deliver the first rate cut in June, compared to 58% before the release.