GBP up from two month low as UK inflation climbs

Forex News – AFTER slumping to a two-month low at the beginning of the week, the GBP/USD exchange rate was able to strengthen modestly on Tuesday.

The pound achieved a high of $1.271 against the US dollar, up from the day’s lows of $1.263.

Although this marks a slight improvement for Sterling, the GBP/USD pairing is still far over 2 cents weaker than its best post-election rate of $1.297.

The fallout from last week’s general election may still be the most significant mover of pound sterling exchange rates, but there was other news today in the form of the UK’s latest Consumer Price Index (CPI).

UK CPI saw annual inflation rise to 2.9 per cent in May, a four-year high.

On the flipside of this news, UK real earnings are also moving quickly, falling at their fastest rate in three years.

Trades Union Congress General Secretary Francis O’Grady has voiced her concern about the news.

She said: “Working people are struggling and the biggest price rises in four years won’t provide any comfort.