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Is the UK Monthly CPI to Blame for Drop in Value of GBP?

August 14, 2018 August 14, 2018 Jessica Wilson

Forex traders have been witnessing some rather unexpected drops in the value of GBP in the last few days, and many of them are scratching their collective heads and trying to make sense of just what is causing Sterling to take a dive on the money markets.

Whilst there is of course lots of uncertainty regarding the Brexit negotiations, there are both good and bad points regarding the UK leaving the EU with either a solid deal in place with the EU or no deal in place what so ever, so it may be worth looking at some other performance indicators that could be causing loss of faith in GBP

As far as the Consumer Prices index goes there is nothing too shocking about the most recent set of figures which indicate the UK economy is performing quite well, and in June the CPI was reported as being 2.40%, which is had been in May and April, in fact it was lower than it was back in March when it was reported as being 2.50%.

In fact, one has to look back to March 2017 for a lower CPI figure than the current one, and in March of 2017 the CUP was slightly lower than it is now having been reported as being 2.30%

A Trade Deal May be the Key to GBP Stability

If there is just one thing that is going to see GP gain in value, it will be an announcement that a final Brexit deal has been struck with the EU.

However, it is very true to say that such an announcement may be a long time in coming if at all, but either way things do need to get a move on for March which is the deadline for the UK leaving the EU under its current terms is fast approaching.

UK Should be Striking Non-EU Trade Deals Now

It does appear that the UK does have its hands somewhat tied so to speak in being able to strike trade deals with other non-EU countries at the current moment in time, as they are not permitted to do so being still in the EU.

However, many commentators are saying that the UK should ignore such regulations and simply get out there and start striking as many trade deals with other countries of the world as they can do, and it will certainly do them no harm to do so!

About The Author

Jessica Wilson

Contributor

Jessica Wilson mans our news desk and as soon as she gets win of any breaking Forex and currency trading news stories she will be reporting on them to you.

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