EUR/GBP ended the day higher after inflation in Great Britain for April surprisingly surprising to the upper part, in relation to consensus estimates as well as Boe, a report of FX Danske Bank analysts.

More cuts in August and November

“The headline amounted to 3.5%y/y (disadvantages: 3.3%, earlier: 2.6%, Boe: 3.4%) and services in the amount of 5.4%y/y (disadvantages: 4.8%, earlier: 4.7%, Boe: 5.0%). As in the case of PMI data for April, this indicates a more cautious cycle of cutting with a greater stagflation with a still increased price. We consider GBP.

“In addition, we notice that the annual indexation of a number of services took place in April, for example in the case of telephone and internet accounts. The impact of energy prices, boost in water bills, tax on a car road and Easter time raised prints yesterday, which means that Boe is in order to solution for price tax.”

“Markets have decreased to cuts, valuing cuts worth 40 BP by the end of the year. We expect two more cuts in August and November.”