GBP/USD surges as UK inflation exceeds expectations significantly

GBP/USD has rallied sharply following hotter-than-expected UK inflation data, with the pair gaining momentum during the European session. The UK Consumer Price Index came in significantly above forecasts, reinforcing expectations that the Bank of England may need to maintain its hawkish stance on monetary policy. This inflation surprise has prompted traders to reassess rate differential dynamics between the UK and US, with markets now pricing in a higher probability of sustained BoE rates. The pound's strength was broad-based, gaining against most major currencies as the inflation print exceeded both headline and core measures. Technical indicators suggest bullish momentum building, with GBP/USD breaking above key resistance levels. The data strengthens the case for GBP outperformance in the near term, particularly if UK inflation remains sticky while other major economies see cooling price pressures. Traders should monitor upcoming BoE communications for policy guidance.