GBP/SEK gains after UK CPI, eyes on BoE meeting

The GBP/SEK currency pair gained ground on Wednesday, after data showed annual core inflation in the UK picked up in August, a day before the Bank of England announces its policy decision.

Annual inflation rate in the UK remained steady at 2.2% in August, data by the Office for National Statistics showed, in line with market consensus.

The biggest upward pressure came from air fares, which rose 11.9% YoY, and cost of recreation and culture, up 4% YoY.

Also, services inflation, which is closely monitored by the Bank of England, picked up to 5.6% in August from 5.2% in July.

The BoE had projected annual inflation rate of 2.4% in August before an acceleration to around 2.75% by year-end.

UK’s annual core CPI inflation, which excludes volatile categories such as food and energy, accelerated to 3.6% in August, the highest rate since April, from 3.3% in July.

The Bank of England is largely expected to keep its benchmark interest rate without change at 5% at its policy meeting tomorrow.

The BoE cut its bank rate by 25 basis points to 5% in August, but said it would move cautiously in easing monetary policy further until the Monetary Policy Council was more certain that inflation would remain subdued.

Meanwhile, in other data, Sweden’s unemployment rate was reported to have risen to 7.9% in August from 7.7% in the same month of 2023.

The number of unemployed persons went up by 9,000 from a year earlier to 453,000 in August, the data showed.

As of 9:47 GMT on Wednesday the GBP/SEK currency pair was edging up 0.21% to trade at 13.4358.