Ella 
In early Asian trading on Friday, GBP/USD rose to a nearly one-week high. UK gross domestic product is expected to have increased by 0.2% monthly in November, after shrinking by 0.3% in the previous month. GBP/USD is currently trading around 1.2780, up 0.16% on the day.
Bank of England (BOE) Governor Andrew Bailey predicted it would be an uphill battle to get inflation back to the 2% target, while also hitting back at speculation about a rate cut. However, lower energy prices could push inflation down at a faster pace than the Bank of England expects. The Bank of England may be forced to propose a timetable for its first interest rate cut after the latest data from three major forecasters unexpectedly suggested that inflation will halve to 2% by April.
In the U.S. dollar, the latest U.S. inflation data may challenge the Federal Reserve’s plans to cut interest rates this year. Data released by the U.S. Bureau of Labor Statistics on Thursday showed that the U.S. consumer price index increased at an annual rate of 3.4% in December, higher than the 3.1% increase last month. Excluding volatile food and energy prices, core inflation rose at an annual rate of 3.9% in December, above expectations of 3.8%.
