Anna 
In Monday’s London trading session, the Pound Sterling (GBP) has advanced to nearly 1.2750 against the US Dollar (USD). The GBP/USD pair remains robust as bets favoring a reduction in interest rates by the Bank of England (BoE) at the June meeting have diminished, primarily due to a slower-than-expected decline in the United Kingdom’s (UK) consumer inflation for April.
Economists had anticipated that UK headline inflation would decrease to 2.1% year-over-year in April. However, the actual figure slowed to 2.3% from the previous reading of 3.2%. Additionally, a marginal decrease in UK service inflation intensifies concerns about inflation persisting for an extended period. UK service inflation edged down slightly to 5.9% from the previous reading of 6.0%. The persistent nature of UK service inflation has posed a significant obstacle to price pressures reaching the target rate of 2%.
Nevertheless, other economic indicators, such as Retail Sales and the preliminary Purchasing Managers’ Index (PMI) report for May, indicate that the UK economy is grappling with absorbing the ramifications of higher BoE interest rates. Retail Sales witnessed a notable decline as rainfall dampened consumer footfall at retail establishments. May’s S&P Global/CIPS Composite PMI experienced a downturn due to a sharp drop in demand within the service sector.
