FX: UK CPI Misses Expectations

  • UK CPI (YoY) (Dec)  1.3% vs exp 1.5% prev 1.5% 
  • Compouded by more dovish comments from BoE's Saunders

GBP/USD takes a dive this morning after inflation figures missed expectations and came in at 1.3% YoY vs analysts expectations of 1.5%. This could leave the door open for a cut after various analysts have come out to say that the Bank of England may need to reduce the main rate by 0.25bps. Today BoE’s Saunders was the latest to comment saying, it would probably be appropriate to maintain an expansionary policy stance and possibly to cut rates further. This follows the FT interview with Gertjan Vlieghe which also sounded a dovish tone.