UK May CPI rose +0.6% m/m and +2.2% y/y, stronger than median forecasts of +0.3% and +2.0% respectively.
Besides the anticipated upward effect from tax rises for alcohol and tobacco in this year’s Budget, the chief upward influences were from rising prices of DVDs, televisions, clothing and footwear.
Cable has been lifted by the data, shooting higher, presently at 1.6405. Some will see in the data increased chances of an early-ish Bank of England rate hike. Don’t see it myself. Think rates are going to be kept on hold for sometime to come.
