GBP/USD drops back after UK CPI falls by more than expected

The eagerly awaited UK CPI and RPI July inflation reports have just now been released. As noted here earlier this morning, the markets were expecting mixed data here, in terms of diverging monthly ands annualised readings. Well, that is not exactly what we just got because both the monthly and annualised readings have fallen below forecasts. The monthly rate of CPI fell by 0.2% and the core annualised rate fell to 3.3% from 3.5%, The annualised services index fell by more than expected too. That dropped back to 5.2% from 5.7%. At the same time annualised retail prices did rise and by more than forecast (3.6% from 2.9%) , but the focus for the markets and the Pound is surely the services and CPI data. So, the Pound has fallen back on this news as it does potentially pave the way for another BOE rate cut next month. The GBP/USD was trading at 1.2860 ahead of the release. It is its now trading at 1.2825