© Reuters.

By Sam Boughedda

Investing.com — The is approaching 1.35 on Wednesday, rising just under half a percent following Consumer Price Index (CPI) data that beat estimates.

The U.K. CPI increased by 4.2% year over year in October, above the expected 3.9%. Meanwhile, monthly CPI came in at 1.1%, again above the 0.8% predicted for October. 

September’s 12-month rate was 3.1%, while the monthly rate was 0.3%.

“The largest upward contribution to the October 2021 CPIH 12-month inflation rate came from housing and household services (1.23 percentage points), with further large upward contributions from transport (1.08 percentage points) and restaurants and hotels (0.43 percentage points),” the Office of National Statistics said.

The GBP spiked in reaction to the news this morning before retracing within the same hour. However, the retracement could not be maintained, and the GBP continued to climb against all of the other major currencies, barring the . 

Cable is currently 10 pips off of the 1.35 level. Traders once again seem to be pricing in a Bank of England rate hike, after disappointment following a 7 to 2 decision to keep rates unchanged earlier this month.

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