UK inflation in December +0.6% year on year, up from +0.3% in November and beats forecasts of 0.5%.

In any other year this increase in inflation could spark talk of tighter monetary policy. But this year is unlike any. With rates still extremely low and covid still the focus of attention a rate rise is not going to happen.

Even so GBP/USD, is still rising within the ascending channel on the daily chart dating back to late September last year.


GBP has been underpinned by the current risk-on tone generated by the prospect of a large US stimulus package and by the rollout of coronavirus vaccines. Those factors outweigh any bad news such as the extension of Covid-19 restrictions in Germany.