Consumer price index (CPI) is the leading indicator for inflation in an economy. UK inflation jumps by a stunning margin to 1.9% for June. This is in comparison to May`s rate of 1.5% and a forecast of 1.6%. Clearly the prudent economists did not expect such a big hike.
This caused the GBP to appreciate against other currencies, due to investor sentiments. Purchasing power parity is not followed here.
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