GBP/USD: Sterling Slips Below $1.27 After UK Inflation Hits Cool 3.9% for November

Consumer prices increased less than expected in the past month, giving traders and the Bank of England a reprieve.

• The GBPUSD pair shifted gears to lower levels on Wednesday after the UK economy flickered signs of cooling. British inflation slowed sharply in November, sliding to 3.9%, down from 4.6% in October and below analysts’ estimates for a 4.4% annual increase.
• The news put pressure on the sterling, knocking its valuation against the dollar to $1.2650, down 0.5% in early trading. Over the past week, the UK currency has been dealing with tough resistance in the $1.27 neighborhood. Over the past three months, the pair has added roughly 6% upside.
• November’s uplifting inflation data intensifies expectations that the Bank of England may look to start cutting rates in 2024. Previously, the UK’s central bankers sought to deviate from that path, already adopted by their US counterparts, on the notion that inflation is still a pain to the economy.