UK inflation dropped less than we were expecting yesterday from 10.4% to 10.1% year on year in the March quarter after 9.8% was predicted. It has remained above 10% for the seventh consecutive period now going back to July 2022. Pressures came from food and alcohol 19.1 vs 18.0 in February, recreation and goods and services. The cost of borrowing and utilities have also risen from 26.6% from 26.1% the previous month. These rises indicate the worst cost of living squeeze in a generation. We should see the Bank of England raise rates accordingly with an expected 3 more hikes this year. The pair sits around 0.5420 (1.8440) in this morning’s trading with further upside in the Pound expected in the medium term.
The current interbank midrate is: AUDGBP 0.5417 GBPAUD 1.8460
The interbank range this week has been: AUDGBP 0.5387- 0.5435 GBPAUD 1.8396- 1.8563