Pound Steadies Amid Inflation Cuts and Political Uncertainty
The pound remained stable against the dollar amid easing British inflation, suggesting a potential rate cut from the Bank of England. While consumer inflation slowed, services inflation remained slightly elevated. Political unrest in Britain, notably within the Labour Party, continues to influence pound trading dynamics.
The British pound maintained its position against the dollar as a slowdown in UK inflation bolstered prospects for a Bank of England interest rate cut. Despite this, underlying pressures on prices persist.
Official data showed a decrease in annual consumer price inflation to 3% last month, down from 3.4% in December. Notably, services inflation slightly decreased to 4.4%, remaining higher than several analysts had projected. Following mixed inflation figures, the pound remained steady at $1.3566, following a previous dip.
Political tensions also play a role in market reactions, with Prime Minister Keir Starmer facing internal Labour Party challenges. An upcoming by-election in Greater Manchester could further influence Starmer's standing and market sentiment.
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