UK inflation officially goes over 10%


During the last year in which many Western nations have experienced high levels of inflation, there have been official figures which have been relatively conservative estimates, and unofficial figures which have suggested that inflation in the United States and Britain has been into double digits for quite some time.

It is, however, the official figures which tend to have an impact on the currency and stock markets, therefore today's revelation that the British economy has begun to experience 10.1% inflation is of great interest.

The news channels this morning were quick to highlight the inflation level going over the 10% threshold, however very little effect has been shown with relation to the value of the British Pound against the Euro or US Dollar.

This is perhaps because the anticipation has been steadily building over time, hence this is perhaps not a surprise, and generally it is surprises that tend to create sudden volatility in the financial markets.

What it does depict is that double digit levels of inflation in the UK have been reached, and this is not a good sign for the economy which continues to decline. The British Pound today remains at around 1.12 against the US Dollar, continuing its low value which, despite a few small movements upwards over recent days, represents a steady decline over the past weeks which followed a long period of rapid depreciation.

What we perhaps can learn is that despite the new Chancellor of the Exchequer Jeremy Hunt having almost completely reversed the mini-budget issued by recently installed Prime Minister Liz Truss, a clear sign of an unstable government and a weakening economy, the Pound has not suddenly crashed to even lower levels.

Perhaps it has bottomed out, or investors and traders have understood that the declining economy and suddenly unstable government in a usually extremely stable and calm nation is now a relatively long term matter, and that the state of the economy is now somehow measurable.

Therefore, despite the sensationalist headlines, the value of the Pound against its Western major peers is a case of business as usual.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Financial Market News

Weekly Market Wrap With Gary Thomson: S&P500, US Dollar, Gold Price, PEP Stocks Weekly Market Wrap With Gary Thomson: UK100, Hang Seng Index, AUD/JPY, GBP/USD, USD/CAD Japanese Yen Goes on Volatility Drive after US Economic Uncertainty Surfaces Weekly Market Wrap With Gary Thomson: FTSE100, US Dollar, USD/JPY, BTC/USD Weekly Market Wrap With Gary Thomson: UK100, USD, GOLD, OIL

Latest articles


Tech Stocks Back in Vogue as Nasdaq 100 Rallies to Record High

The tech-heavy Nasdaq 100 index (US Tech 100 mini on FXOpen’s TickTrader platform) reached a new all-time high on Monday, closing the trading session at 18,684.2 according to FXOpen pricing, fueled by renewed investor enthusiasm for technology


Gold Price Reaches Historic High

According to confirmed information, Iranian President Ebrahim Raisi, considered a potential successor to the country's supreme leader, Ayatollah Ali Khamenei, died in a helicopter crash in a mountainous area near the border with Azerbaijan. The helicopter also carried Foreign Minister

Forex Analysis

Commodity Currencies Retreat from Local Highs

Despite the cooling labour market in the US and declining inflation, the American currency continues to move towards new highs. For instance, the USD/JPY currency pair might update the current month's high at 156.70, the NZD/USD sharply

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.