December’s UK Consumer Price Index figures are set to show that the annual pace of inflation jumped to 2.6%, marking the largest increase in over 18 years and the highest overall reading since March 2009. The Core CPI gauge that excludes the price of volatile items like food and energy is set to gain 2.3% over the period. The data may boost the British Pound, reinforcing last week’s comments from Bank of England policymaker Andrew Sentence who warned in an interview with The Guardian newspaper that the central bank may need to raise interest rates this year to curb inflation amid economic recovery. Those comments set off a sharp upswing in the UK currency, helping it soundly outperform its top European counterparts (Euro, Swiss Franc) to close the week above the 1.62 level to the US Dollar, which technical studies suggest may open the door for a rise to 1.6750.
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Read More British Pound May Extend Rebound as Inflation Rises Most in 18 Years
