UK August CPI +0.7% vs +0.5% m/m expected

Author: Justin Low | Category: News

Latest data released by ONS - 19 September 2018

  • Prior 0.0%
  • CPI +2.7% vs +2.4% y/y expected
  • Prior +2.5%
  • Core CPI +2.1% vs +1.8% y/y expected
  • Prior +1.9%
Those are some major beats across the board with the core also rising above 2% once again now. That will help to continue to underpin the pound on the day. GBP/USD ticks to session highs of 1.3205 now from 1.3270 prior to the release.

Looking at the details, headline inflation jumps to its highest levels in six months boosted by theatre shows, sea and air fares, as well as clothing. Very much a summer-related boost right there.

Either way, pound buyers got the fuel they needed to lift price higher and the big question now is can the cable hold a break above the 100-day MA @ 1.3165? I'm looking for reasons to fade the move here but with near-term price momentum more bullish and a firm break of the 100-day MA on the cards it's hard to argue that case. Add to the fact that I'm also erring towards a more positive Brexit rhetoric to come from Salzburg even though there won't be any meaningful progress so that may help underpin the pound further in the day.

Some other details on the day as producer price and retail price figures are released:

  • PPI output +0.2% vs +0.2% m/m expected
  • PPI output +2.9%% vs +2.9% y/y expected
  • PPI input +0.5% vs +0.5% m/m expected
  • PPI input +8.7% vs +9.1% y/y expected
  • RPI +0.9% vs +0.6% m/m expected
  • RPI +3.5% vs +3.2% y/y expected
  • July HPI +3.1% vs +3.0% y/y prior; revised to +3.2%

Not much other details to point out in the report but once again London house prices continue to lead declines in the housing space. London dwellings fell 0.7% y/y and that's the lowest recorded reading since September 2009.

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