The British pound is today the weakest G10 currency, after a significantly weaker-than-expected inflation report opened the door wide for the first Bank of England rate cut since August. The broad month-on-month price decline marks an end to the persistent inflation stickiness seen in the UK in recent months.
GBPUSD slipped to the 100-day exponential moving average (EMA100, dark purple), breaking the uptrend that began in November. Further weakness will largely depend on BoE communication, but given the global slowdown in rate cuts (except in the U.S.), a retest of the 1.30 level seems inevitable. Source: xStation5
What drives GBPUSD today?
- The latest UK inflation report showed a broad, unexpected drop in prices compared with the previous month. CPI fell in November to 3.2% from 3.6% in October (-0.2% MoM). Core CPI also dropped to 3.2% (forecast and previous 3.4%), while producer price inflation eased to 3.5% from 3.6%.
- The largest price declines were in the food and beverages category (from 4.9% to 4.2%), a key focus for the BoE as it gauges household inflation expectations. Alcohol, tobacco, and household services also contributed to the declines.
- The reading strongly increases expectations for a BoE rate cut. UK rates are currently the highest among G10 countries, with previous cuts paused as inflation returned below 4% (3.8% in July–September). The faster-than-expected drop in price pressures has boosted market expectations for monetary easing, interrupting pound gains.
- The market currently prices in a nearly 98% probability of a 25bp rate cut at tomorrow’s BoE meeting, with a further cut expected in April 2026.
The material on this page does not constitute financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other specific needs. All information provided, including opinions, market research, mathematical results and technical analyzes published on the Website or transmitted To you by other means, it is provided for information purposes only and should in no way be construed as an offer or solicitation for a transaction in any financial instrument, nor should the information provided be construed as advice of a legal or financial nature on which any investment decisions you make should be based exclusively To your level of understanding, investment objectives, financial situation, or other specific needs, any decision to act on the information published on the Website or sent to you by other means is entirely at your own risk if you In doubt or unsure about your understanding of a particular product, instrument, service or transaction, you should seek professional or legal advice before trading. Investing in CFDs carries a high level of risk, as they are leveraged products and have small movements Often the market can result in much larger movements in the value of your investment, and this can work against you or in your favor. Please ensure you fully understand the risks involved, taking into account investments objectives and level of experience, before trading and, if necessary, seek independent advice.
