Consumer prices rose four percent in January adding further pressure to the Bank of England to raise interest rates from the current 0.5 percent. As speculation that the Bank will be forced to act within the next two months grows, the pound has enjoyed a boost rising to a two-week high against the dollar earlier today.
“It seems inevitable that rates will need to go up in the next two quarters,” said Chris Huddleston, a trader at Investec Bank Plc in London. “The retail data adds to that argument. The market is moving to price in further gains in sterling.”
Source: Bloomberg