The Pound reversed yesterday’s losses against the Euro and other major peers after data released on Tuesday showed that UK inflation fell to 2%, the target set by the Bank of England.
According to the Office for National Statistics the UK’s inflation rate, as measured by a Consumer Price Index fell to 2% in December, down from the previous month’s figure of 2.1%. The fall is the first time that inflation has matched the BoE’s target in more than four years.
The data bolstered confidence in the UK economic recovery and sent the Pound back above the 1.20 mark against the Euro.
“Today’s data, which show inflation has returned to its target and fallen to its lowest level for four years – is another sign that the governments long term economic plan is working,” said a HM Treasury spokesmen.
The Euro found support after a report showed that November’s Industrial production in the Eurozone came in far better than economists had been forecasting. Economists had been expecting production of a monthly basis to come in at 0.7%, instead production jumped by 1.8%. On a yearly basis production smashed forecasts for a figure of -0.25 to come in at 3%.
The increase in industrial production was spread across much of the Eurozone, with Germany recording a 2.4% rise, France a 1.4% increase, Spain a 1% rise and Italy recorded a rise of 0.3%. Output also rose in Ireland and Portugal, but fell 2.2% in Greece. Estonia was the only other member to record a decline.
The data bolstered confidence that the Eurozone recovery is beginning to pick up some traction. Over the past few weeks Eurozone data has often beat economist expectations but the unemployment rate remains the major sticking point for a recovery.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3671 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8332 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5168 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6282 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7313 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.2000 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6590 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6140 >
(Correct as of 10:20 am GMT)
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