Presented at the beginning of today's European session, data on Consumer inflation in the UK caused a surge in volatility in the dynamics of the pound. The consumer price index (CPI) of Great Britain in November grew by 3.1% (in annual terms), exceeding the forecast by 0.1% and the target inflation rate by 1%.
Consumer prices in the UK in November grew at the fastest pace in the past six years, and signs of a weakening of price pressure are not observed.
Accelerating inflation increases the pressure on household budgets, which has a negative impact on consumer spending and the economy as a whole, focused mainly on the domestic market.
A significant share of the UK's GDP is made up of consumer spending. Due to the sharp drop in the pound after the referendum on Brexit, both imported consumer goods and raw materials imported to the UK rose in price. This, in turn, increased the producers' selling prices, and as a result, accelerated the growth of prices for consumer goods.