This week, the British pound reached its highest peak in three years after data revealed an unexpected acceleration in consumer inflation for April. The higher-than-anticipated inflation figures pose a challenge for the Bank of England as they consider interest rate cuts to bolster economic growth.
According to the Office for National Statistics, consumer prices surged to a 3.5% increase in April, up from 2.6% in March. This marks the sharpest rise since 2022, leading sterling to climb as much as 0.58% to $1.347, though it remained stable against the euro at 84.325 pence.
Finance Minister Rachel Reeves expressed disappointment, acknowledging the continued pressure on the cost of living for working people. Despite projections by economists and the Bank of England, the substantial rise in inflation highlights significant domestic price pressures, likely influencing future monetary policy decisions.
(With inputs from agencies.)