UK inflation data due Tuesday - preview

December Inflation data due at 0930 GMT from the UK

Preview via RBC:

• The headline rate of UK inflation is expected to have eased back slightly in December 2017 to 3.0%, from 3.1% y/y previously
• At the same time we look for CPIH inflation (the measure which includes owner-occupiers' housing costs) to have softened by 0.1ppt, to 2.7% y/y.
• Elements of last month's contraction in the RPI-CPI 'wedge' look slightly anomalous, so a reversion could easily result in RPI inflation printing at 4.0% y/y at the end of 2017 (from 3.9% y/y).
• Recall that, last month, confirmation of CPI inflation printing over one percentage point above the 2% target triggered the requirement for Governor Carney to write an open letter of explanation to the Chancellor. That letter should be expected alongside the February Inflation Report from the Bank of England, even if CPI falls back below 3% y/y as expected.