UK inflation
|Headline CPI came in at +3.0% annualised, down a touch from the previous month.
Core CPI (excluding food and energy) rose 2.5% - below both the +2.6% expected and the prior reading of 2.7%.
The data suggests that UK inflation may have peaked, taking the pressure off the Bank of England to some extent. Last month headline CPI broke above 3.1% requiring an official letter from the Governor of the Bank of England to the Chancellor.
Sterling fell slightly on the news. The pound surged higher at the end of last week in a move which saw the GBPUSD break above resistance around 1.3600 to hit its highest level since its post-referendum sell-off in June 2016. If it manages to hold on to recent gains and consolidate above 1.3600 (now support) then sterling bulls see 1.4000 as an achievable upside target.
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