GBP/USD Plunges to 1.2620 as Weak UK CPI Boosts BoE Cut Bets
GBP/USD has tumbled 0.8% to 1.2620 following weaker-than-expected UK inflation data that reignited Bank of England rate cut speculation. UK CPI fell to 2.5% year-over-year in November, missing forecasts of 2.6%, while core inflation dropped to 3.5% from 3.7%. The soft inflation print has pushed market pricing for a December BoE rate cut to 65% probability, up from 40% before the data release. Sterling weakness accelerated through key technical support at 1.2650, with the pair now testing the 1.2600 psychological level. The disappointing CPI data compounds existing concerns about UK economic growth, with recent PMI surveys showing contraction in manufacturing activity. Near-term support lies at 1.2580 (October low), while resistance has formed at the broken 1.2650 level. Further BoE dovishness could extend losses toward 1.2500.
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