The Pound Sterling to Indian Rupee (GBP/INR) exchange rate dropped over 0.45% on Wednesday as investors ditched the Pound in response to the UK’s disappointing wage growth figures and the Bank of England’s Inflation Report.
However, although the Rupee advanced on the Pound, it fell flat against the US Dollar as yesterday’s disappointing Indian Inflation and Industrial Production data took a toll.
India’s Consumer Price Index advanced by 7.96 in July from the same period of the previous year – the strongest surge in consumer prices for two months and higher than forecast by economists.
Separate data detailed a smaller-than-forecast increase in Indian Industrial Production.
Production was expected to have increased by 5.6% in June but it actually only climbed by 3.4%.
After the data was published economist Devika Mehndiratta said of the report; ‘The jump in inflation is disappointing. Though industrial production growth disappointed, a deteriorating inflation outlook will effectively tie the hands of the Reserve Bank of India.’
The Rupee shed 0.3% against the US Dollar and held declines on Wednesday.
However, it was UK news driving the Pound Sterling to Indian Rupee exchange rate and the fact that UK average wage growth fell short of forecasts caused widespread Pound losses.
The UK’s unemployment rate might be declining but the fact that wage growth is running so far below inflation has quashed the likelihood of the Bank of England raising interest rates this year.
The odds of a rate hike taking place before Christmas were further flattened after the Bank of England published its quarterly inflation report.
The central bank opted to slash its wage growth projections, and in the opinion of industry expert Frances O’Grady; ‘The combination of rising employment and falling pay growth suggests the economy is very good at creating low-paid jobs, but struggling to create the better-paid work we need for a fair and sustainable recovery. Self-employment has been responsible for almost half of the rise in employment over the last year. The fact that self-employed workers generally earn less than employees means our pay crisis is even deeper than previously thought, as their pay is not recorded in official figures.’
Pound Sterling to Indian Rupee Exchange Rate Forecast
Pound Sterling weakness is likely to persist for the rest of the week, although a positive surprise in the form of the UK’s second quarter growth report (out on Friday) could help Sterling stage a rebound.
Other factors which could impact the Pound Sterling to Indian Rupee exchange rate this week include India’s Wholesale Price Inflation data and the nation’s Balance of Trade figures – both due out on Thursday.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trading in the region of 102.2200.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,102.2200,
US Dollar,,Indian Rupee,61.2600,
Euro,,Indian Rupee,81.8280,
Australian Dollar,,Indian Rupee,56.8980,
New Zealand Dollar,,Indian Rupee,51.6540,
[/table]
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