• GBP/USD falls after the release of US CPI data shows headline inflation falling but core remaining stubbornly high. 
• The data suggests the Fed will take a cautious approach to easing and probably cut rates by 25 not 50 bps.
• GBP is pressured after UK GDP comes out flat in July and misses estimates.  
   

GBP/USD is trading marginally lower in the 1.3060s on Wednesday after the release of US inflation data leads to an appreciation in the US Dollar (USD) amid prospects of a more measured approach to easing from the Federal Reserve (Fed) whilst the Pound Sterling (GBP) loses ground following the release of flat economic growth data. 

US consumer prices rose more or less in line with expectations, although the annual change in the headline Consumer Price Index (CPI) did undershoot economists’ expectations by a point, coming out at 2.5% instead of the 2.6% forecast, according to data from the US Bureau of Labor Statistics on Wednesday. 

Core CPI (ex food and energy) also rose as expected but monthly core CPI rose by a higher-than-expected 0.3% suggesting some stubbornness in core prices, which analysts say comes from sticky dwelling inflation.