Lots of price data from the UK up at the bottom of the hour, CPI, PPI, RPI. After around four years of missing the BOE’s 2% target on the upside inflation managed to hit target for one month only before falling below. A loud “DOH!” was heard from Threadneedle street as it continued lower to the current 1.7%.
We’ve still got plenty of room on inflation and there’s not really any worries over here just yet. We’ll need a move down to 1.0% to get the market really concerned but a small move either side of 1.7% will probably not have much impact on the pound. Anything worse that 1.5% could see some decent selling and a print closer to 2% may get the rate rise bugs clashing heads to hit the £ buy button. The market is looking for 1.6% from the headline figure y/y.
As usual the all important core number warrants close attention and it’s also expected in at 1.6% from 1.7% prior.
PPI input and output prices will give a view on margins among other things and it will be a good sign if output prices remain higher than input prices.
Just about 10 mins to go, so saddle up folks.
