UK April CPI jumps to 3.5%, core CPI 3.8% - GBP/USD pressured

GBP/USD has retreated 0.5% to 1.2420 on the surprising jump in UK April CPI to 3.5% y/y (vs. 3.3% expected) from prior 2.6%. Core CPI also surged to 3.8%, above 3.6% forecasts. The stronger than anticipated inflation readings have led markets to reprice Bank of England rate cut expectations, with only 25-28 bps of easing now priced by year-end. Robust services CPI at 5.4% (vs. 4.8% expected) further underscores persistent price pressures. This upside inflation surprise raises doubts about the BoE's ability to lower rates again in 2025. GBP/USD has found immediate support at 1.2400, but a sustained break below could expose the 1.2350 level. Resistance is noted at 1.2475. Traders will closely monitor upcoming UK economic data and BoE commentary to gauge the central bank's policy stance amid stubborn inflation.