UK June CPI 0.0% vs +0.2% m/m expected

Author: Justin Low | Category: News

Latest data released by ONS - 18 July 2018

  • Prior +0.4%
  • CPI +2.4% vs +2.6% y/y expected
  • Prior +2.4%
  • Core CPI +1.9% vs +2.1% y/y expected (Reuters expected +2.2%)
  • Prior +2.1%
Considerable misses on headline inflation figures and the core even falls below 2%. Cable taken lower immediately to 1.3028 before now bouncing a little back to 1.3045.

Yuck. Soggy inflation numbers right there and the fact that fuel prices have gone up in June has done little to lift overall inflation. Looking at the core measure, it's worse than expected as food prices continue to plunge but the lack of meaningful boost at the pump seems to be the real reason why inflation is slow in June.

The only positive I can see from this is that it eases the debt burden on consumers/household consumption. An August rate hike pricing has now fallen to 69% from about 80% after the UK wages report yesterday. That said, I still see the BOE being able to squeeze in a rate hike come August regardless - but this ultimately reaffirms it will be a one-and-done case.

Cable continues to fall now to 1.3010 with barriers and bids at 1.3000 eyed next.

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

  • PPI output +0.1% vs +0.3% m/m expected
  • PPI output +3.1% vs +3.2% y/y expected
  • PPI input +0.2% vs +0.4% m/m expected
  • PPI input +10.2% vs +10.1% y/y expected
  • RPI +0.3% vs +0.4% m/m expected
  • RPI +3.4% vs +3.5% y/y expected
  • May HPI +3.0% vs +3.9% prior; revised to +3.5%

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