UK annualized CPI beats estimates with 0.6% in Dec, GBP/USD revisits highs
|- UK CPI rises 0.6% YoY in Dec vs. +0.5% expected.
- Monthly UK CPI arrives at +0.3% in Dec vs. +0.2% expected.
- GBP/USD heads back towards daily highs of 1.3669 on the data release.
The UK Consumer Prices Index (CPI) 12-month rate came in at +0.6% in December when compared to +0.3% booked in November while beating expectations of a +0.5% print, the UK Office for National Statistics (ONS) reported on Wednesday.
Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at +1.4% YoY last month versus +1.1% booked in November, outpacing the consensus forecast of +1.3%.
The monthly figures showed that the UK consumer prices arrived at +0.3% in December vs. +0.2% expectations and -0.1% prior.
Main points (via ONS):
“The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 0.8% in December 2020, up from 0.6% in November.”
“The largest contribution to the CPIH 12-month inflation rate came from recreation and culture (0.35 percentage points).”
“Rising transport costs contributed 0.11 percentage points to the monthly change, while increasing prices for clothing, and recreation and culture items both contributed 0.10 percentage points to help increase inflation; these were partially offset by a downward contribution from falling food and non-alcoholic beverage prices.”
FX implications:
Following the upbeat UK CPI numbers, the GBP/USD pair kept its bid tone intact while flirting with daily highs near 1.3669.
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