The British office for national statistics is expected to announce the yearly adjusted CPI rate on Wednesday and the forecast is for the actual inflation to reach the desired level of 2%.
Typically, such a result should give a significant boost to the pound's strength and send it north, however, it is important to note that the consumer prices in the country have been gradually rising mostly because of fears of disorderly Brexit and the potential of a no-deal divorce with the EU bloc as opposed to a sound and solid monetary policy.
What this means is that even if the CPI reaches the ideal 2% mark that could still be perceived as a sign of weakness from the Brexit chaos, rather than as an indication for the stability of the British economy. Conversely, we can expect significant volatility spikes immediately after the report, as the market tries to make sense of the data and adjust itself to the news.
Later on, during the day the Governor of the Bank of England Mark Carney is expected to comment on the inflation data, the prospects for the UK economy and the outlook for sustained economic growth, all of which could add up to the volatility sentiment.
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