Pound Higher As U.K. Inflation Accelerates To 10-year High

The pound gained ground against its major counterparts in the European session on Wednesday, as the nation's consumer inflation surged in November to the highest level since September of 2011.

Data from the Office for National Statistics showed that consumer price inflation rose to 5.1 percent in November from 4.2 percent in October. This was the biggest rate since September 2011, when inflation stood at 5.2 percent.

The rate was forecast to rise to 4.7 percent. The inflation rate stands well above the central bank's target of 2 percent.

On a monthly basis, consumer prices grew 0.7 percent, following October's 1.1 percent increase. Prices were forecast to climb 0.8 percent.

Core inflation that excludes energy, food, alcoholic beverages and tobacco, advanced to 4 percent from 3.4 percent in October.

Another report from the ONS showed that factory gate inflation increased at the fastest pace since September 2008. Output price inflation climbed to 9.1 percent in November from 8.6 percent in the previous month.

On the month, the rate of output inflation was 0.9 percent, but down from 1.5 percent in October.

Further, data showed that input price inflation hit its highest rate since August 2008. Input price inflation rose to 14.3 percent from 13.7 percent in October.

Month-on-month, input prices gained 1 percent versus 1.6 percent a month ago.

The Bank of England will deliver its rate decision on Thursday. Market participants widely expect it to hold off on raising rates due to the economic threats from the spread of Omicron coronavirus variant.

The pound firmed to an 8-day high of 1.3282 against the dollar from yesterday's close of 1.3225. The currency may possibly challenge resistance around the 1.34 level.

The pound reached as high as 1.2278 against the franc, setting an 8-day high. The pair had closed Tuesday's deals at 1.2207. The pound is seen finding resistance around the 1.24 level.

The pound jumped to an 8-day high of 151.01 against the yen, up from Tuesday's close of 150.41. The pound may test resistance around the 153.00 region, should it rallies again.

The pound climbed to 0.8486 against the euro for the first time since November 30. At Tuesday's close, the pair was valued at 0.8509. On the upside, 0.82 is possibly seen as its next resistance level.

Looking ahead, U.S. retail sales and export and import prices for November, as well as business inventories data for October, New York Fed's empire manufacturing index and NAHB housing market index for December will be released in the New York session.

At 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the federal funds rate to be kept at 0-0.25 percent.