I posted a preview of the CPI data here earlier: UK CPI and Fed minutes due today.
More now:
Daiwa:
- The headline rate could slip by 0.1ppt from March's 2.5%Y/Y, if an easing in the likes of travel fares after the relatively early Easter offset the impact of the higher oil price. The former should allow the core rate to fall by as much as 0.2ppt from March's 2.3%Y/Y. On our forecast, the headline rate is on track to move close to the 2%Y/Y target by the end of the year.
Danske Bank:
- One of the reasons the Bank of England stayed on hold in May was that inflation fell more quickly than it projected in February. Inflation is falling back towards 2%, as the impact of GBP depreciation fades. How fast it falls back will be an important factor for how fast the Bank of England tightens monetary policy, as lower inflation means it can support the economy for longer.
RBC:
- Last time out, CPI inflation surprised to the downside, dropping to 2.5% from 2.7% previously. That was a second consecutive month in which CPI inflation fell but we look for the rate to hold at 2.5% on this occasion. Falling fuel prices have helped inflation fall more than expected in recent months but that effect looks to have reversed in April with pump prices rising 1.6% m/m. That will have placed upward pressure on headline last month though that is likely to be countered on this occasion by the downward effect of Easter falling in April last year compared to March this year.
Nomura:
- Clothing and footwear, alcohol and tobacco, and personal care/insurance each took around 0.1pp off CPI inflation in March. We see inflation remaining at 2.5% despite those moves partly reversing and petrol prices rising. A 0.9pp wedge means a small rise in RPI inflation from 3.3% to 3.4%
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