Bank of England nods to rate cuts ahead, consumers spent less in January, and house prices hit their highest level since October 2022.
The GBPUSD pair pushed higher for a second straight day on Wednesday as traders lined up their long bets on a string of economic data. The exchange rate jumped above $1.26 with a daily high of $1.2630 after floating at a weekly low of $1.2118 on Monday. The British pound is on its way to close out a second day of gains, following a steep two-day drop.
The Bank of England raised investors’ hopes of an interest-rate reduction, saying it will start trimming down borrowing costs as a “reward” for the steady drop in inflation. Consumer prices were last seen out and about at 4.0% for December, up from 3.9% in November. January’s inflation data will be released on February 14. In the meantime, interest rates stay at 5.25 to 5.50%.

In addition, retail spending slowed in January, coming in at 1.2% from a year ago. The figure was below the 1.7% growth in December, casting a shadow over the strength of consumer demand. And finally, house prices continued to pick up the pace, averaging £291,029 (roughly $370,000) between December and January. It represents a 2.5% increase from a year ago and is the highest level since October 2022.