The report here pretty much seals the deal of another 25 bps rate hike by the BOE next month, as inflation continues to run hot and sticky in the UK economy. This just piles on the pressure on policymakers after wages data also surprised higher yesterday here.
The pound is getting a lift on the day, with cable jumping from around 1.2415 to a high of 1.2443 before holding just below that now.
Looking at the near-term chart above, the 200-hour moving average (blue line) is a key point of focus now, and that sits at 1.2435. The level helped to limit the upside push yesterday and will act alongside the 100-hour moving average (red line) at 1.2445 in trying to keep a lid on price gains today.
A break above both of that will see buyers seize back near-term control and allow for room to roam towards 1.2500 next potentially.
Despite the hotter inflation numbers, do keep in mind that the OIS market had already shown that traders have priced in roughly 78% odds of a 25 bps rate hike already coming into today. As such, that points to limited upside for the pound as the remainder of the market converges towards that view.