UK June CPI fell to 2.6% YoY, below forecasts, easing pressure on the Bank of England to adjust rates soon.
The British Pound extended losses against the US Dollar, trading below 1.3400 after UK inflation data undershot expectations. The Consumer Price Index rose 2.6% year-over-year in June, down from 2.8% in May and below the 2.7% consensus forecast. Core CPI held steady at 2.6%, matching the headline rate but slightly above the 2.5% estimate.
Producer prices also signaled cooling inflationary pressures. Input PPI contracted 2% month-over-month, the sharpest decline in over six years, while output PPI remained flat, missing expectations of a 0.4% increase. Year-over-year, input PPI eased to 7.3% from 9.3%, and output PPI slowed to 3.5% from 3.7%.
The US Dollar maintained strength amid geopolitical tensions in the Middle East and rising Treasury yields, further weighing on GBP/USD. The pair has fallen nearly 1.2% over the past four days, reflecting shifting monetary policy expectations.