The British Pound (GBP) fell against the Canadian Dollar (CAD) on Wednesday, as the latest UK inflation data failed to derail market expectations of gradual easing from the Bank of England (BoE). At the time of writing, the GBP/CAD pair is trading around 1.8540, down approximately 0.22% on the day.
Data from the Office for National Statistics showed that UK consumer price inflation remained flat in December. The Consumer Price Index (CPI) rose 0.4% month-on-month, matching expectations, after falling 0.2% in November. On an annual basis, headline CPI accelerated to 3.4% from 3.2%, beating market expectations of 3.3%, while core inflation remained steady at 3.2%.
A modest rise in headline inflation dampened hopes for a rate cut at the Bank of England’s February meeting. However, employment numbers released the previous day pointed to a cold labor market, keeping the door open for interest rate cuts later this year as policymakers balance steady inflation with a weak growth backdrop.
Bank of England Governor Andrew Bailey said last month that he expected inflation to return to near the Monetary Policy Committee’s 2% target by the middle of this year.
According to the BHH report, the swaps curve calculates a more than 80% chance that the Bank of England will cut interest rates by a total of 50 basis points over the next 12 months.
Elsewhere in the inflation report, Producer Price Index (PPI) data suggested an easing of pressures on pipelines, even as the Retail Price Index (RPI) showed retail inflation remained high. PPI output prices were flat month-on-month in December, while the annual rate remained steady at 3.4%. By contrast, the Retail Price Index rose 0.7% month-on-month after falling 0.4% previously, with the annual rate accelerating to 4.2% from 3.8%.
On the Canadian side, the economic calendar remains relatively weak, with only second-tier data providing limited direction. The Industrial Product Price Index fell by 0.6% month-on-month in December, well below expectations for a 0.3% rise. Meanwhile, the Raw Material Price Index rose 0.5% on a monthly basis, beating expectations for a 0.5% decline.
The price of the British pound today
The table below shows the percentage change of the British Pound (GBP) against the major currencies listed today. The British pound was the strongest against the Swiss franc.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.02% | 0.04% | -0.11% | -0.24% | -0.45% | -0.44% | 0.26% | |
| euro | -0.02% | 0.03% | -0.07% | -0.26% | -0.45% | -0.45% | 0.25% | |
| GBP | -0.04% | -0.03% | -0.11% | -0.29% | -0.48% | -0.48% | 0.21% | |
| JPY | 0.11% | 0.07% | 0.11% | -0.12% | -0.33% | -0.33% | 0.38% | |
| Canadian | 0.24% | 0.26% | 0.29% | 0.12% | -0.20% | -0.20% | 0.50% | |
| Australian dollar | 0.45% | 0.45% | 0.48% | 0.33% | 0.20% | 0.00% | 0.71% | |
| New Zealand dollar | 0.44% | 0.45% | 0.48% | 0.33% | 0.20% | -0.00% | 0.69% | |
| Swiss franc | -0.26% | -0.25% | -0.21% | -0.38% | -0.50% | -0.71% | -0.69% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select the British pound from the left column and move along the horizontal line to the US dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
