GBP/MYR eases from 1-week high ahead of Bank of Malaysia verdict

The GBP/MYR currency pair pulled back from a 1-week high of 5.4694 ahead of the outcome of the Central Bank of Malaysia’s policy meeting.

At the same time, a hotter-than-expected UK inflation reading curbed expectations of further interest rate cuts by the Bank of England.

The UK Office for National Statistics reported that headline CPI had risen 3.4% year-on-year in December. That figure exceeded both November’s 3.2% YoY increase and the 3.3% consensus.

Core CPI, which excludes food and energy, rose 3.2% year-on-year in December, while matching the prior reading and the consensus.

And, services inflation picked up to 4.5% in December from 4.4% in November.

In its December Monetary Policy Summary, the BoE said the scale of any additional rate reductions would depend on how the inflation outlook develops.

While officials still saw room for more rate cuts over time, they warned that subsequent decisions on easing were becoming a “closer call.”

Meanwhile, the Central Bank of Malaysia is anticipated to maintain its benchmark interest rate at 2.75% at its January 22nd meeting.

Policy makers had said headline inflation was expected to remain moderate in 2026 amid continued easing in global cost pressures, while core inflation is expected to remain stable and close to its long-term average.

The latest data showed annual headline inflation in Malaysia had picked up to 1.6% in December from 1.4% in November. It has been the highest rate since January.

And, annual core inflation picked up to 2.3% in December, or the highest since October 2023.

The GBP/MYR currency pair was last down 0.27% on the day to trade at 5.4324.