However, the impact of the latest statistics was offset by weaker than expected producer price index numbers that suggest CPI inflation could soon fall back as weaker than predicted input costs and factory gate prices work their way into the shops.
The initial response in GBP/USD to the latest statistics was a recovery after the pair’s sharp fall Tuesday on news of hotter than predicted US inflation. However, there could be some limited downside ahead given the PPI data that reopen the debate about whether inflation worldwide is transitory or now embedded in the global economy. On the basis of these numbers the answer could be transitory, in the UK at least.
