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GBP - Can CPI Data Release Help Lift the GBP

Updated 4 months ago

The GBP needs a lift, is the CPI date the catalyst? 

After reports on Monday hit that unless the European Union concedes on some key issues, Brexit talks could collapse. This has to lead the market responding to the indecision surrounding the swift if the possible exit of from the European Union. 

On Tuesday, the UK releases a host of inflation indicators, led by CPI. The markets are expecting inflation to hit 3.0% in September, up from 2.9% a month earlier.

If the results came in positive for the CPI data it would increase the opportunity of a rate hike in 2018 to help bring equilibrium to the instability surrounding the UK at the moment. Fears are mounting that a "no deal Brexit" could see Pound drop in value and seek parity with major global currencies. 

However, the likelihood of a BOE rate hike in 2018 would drop if the CPI prints below the August figure of 2.9%. In this case, We could see the GBP trade lower against its other counterparts.