LONDON, Jan 20 Reuters Sterling rose against both the dollar and euro on Wednesday, helped by a weaker dollar, while inflation data showed UK prices picked up in December.
Consumer prices rose 0.6 yearonyear in December, after a 0.3 increase the month before, helped by a temporary easing of COVID19 travel restrictions and a rise in global oil prices.
The pound rose against the dollar, helped by U.S. Treasury Secretary nominee Janet Yellens urging lawmakers to act big on spending and worry about debt later an instruction which saw the dollar fall against most major currencies.
At 0910 GMT, the pound was up 0.5 at 1.3698. Versus the euro, it was up around 0.5 at 88.53 pence per euro , having hit its strongest since May 2020.
Inflation has been below the Bank of Englands 2 target since mid2019 and the COVID19 pandemic pushed it close to zero as the economy tanked.
Despite the subdued rate of inflation and current economic difficulties linked to the ongoing pandemic restrictions, we do not expect the BoE to step up its monetary stimulus at its upcoming 4 February monetary policy meeting, Kallum Pickering, senior economist at Berenberg, said in a note to clients.
The already planned 150bn pounds of additional asset purchases for 2021, alongside the positive economic outlook from spring onwards, should return inflation to the BoEs 2 target by early 2022, he said.
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