Pound Rises On Inflation Figures
The inflation figures out this morning came in higher than expected showing inflation is easing less than forecast. Consumer price inflation fell to 3.4 percent from 3.6 percent in January, the lowest level in more than a year but still above the consensus forecast for a drop to 3.3 percent.
This generally would be a negative but for the fact it means less chance the Bank of England will look to increase their asset purchase program, which is a positive for the pound. The rates rallied back above the 1.2 mark and held for most of the trading session.
The main focus for the pound now is the annual UK budget, as well as Bank of England minutes tomorrow. Some analysts say sterling could get a boost if George Osborne announces measures to support growth. The budget is expected to show government borrowing next year falling below £100 billion for the first time since 2008/9, while the growth outlook for 2012 could be nudged higher.