Sterling rises after sharp increase in UK PPI
The
UK producer price index (PPI) posted strong gains in January on the back of price rises in crude oil, imported parts and equipment. This in turn caused the Sterling to rise slightly.
The
UK's National Statistics Office said that input prices rose 3.4% in January 2005 compared to December 2004. Year-on-year the prices rose 9.4%.
The data suggest that inflationary pressures are building up, which increases expectations for a possible interest rate hike.