GBP/USD above 1.2200 this morning as UK inflation reports loom

At 7am GMT the first of 2 important inflation reports due out today will be released from the UK. That is the December CPI and RPI data. The markets are expecting Consumer prices to have risen last month, but the core annualised rate is forecast to fall slightly, from 3.5% to 3.4%. A much larger monthly increase in Retail prices is forecast though and the annualised rate of RPI is also expected to rise. Hence, there is some divergence there. The point is; if prices do not significantly abate in both, that poses a deeper problem for the BOE early next month. Yesterday the GBP/USD did eventually rebound and that took hold once the EUR/USD lifted above 1.0278 and the dollar fell back into the 4pm London fix. The GBP/USD later closed in the US at 1.2215. The price action so far this morning has been contained in a range covered by 1.2193 to 1.2218. UK bond yields also remain at the highs leading into this data. There will be more to add as soon as these important releases hit the screens, at 7am GMT. The GBP/USD is currently trading at 1.2203