While inflation remains subdued, UK's inflation expectations are grinding higher. According to a private poll from Citi/YouGov inflation expectations hit highest since November last year.
Inflation expectations rose to 1.6% in July compared to 1.4% in June as per the same poll.
These developments are of higher importance as Bank of England (BOE) governor Mark Carney signaled last month that BOE might raise rates at turn of the year.
BOE's own survey which lags two months, show similar rise in inflation expectations to 2.2% in May for 1 year ahead.
With recent pickup in wage growth, Bank of England (BOE) stands close to first rate hike since 2007.
Pound as of now trading in tight congestion against dollar as FED is expected to hike rates this year, quite ahead of BOE.
Focus will shift to BOE and Pound, once the FED hike is done with.
Pound is currently trading at 1.561 against dollar.


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