UK: CPI inflation likely to print 2.5% for June – Nomura
|Analysts at Nomura suggest that rising oil prices and household energy bills together are likely to add between 0.1pp and 0.2pp to the annual rate of CPI inflation in June for the UK economy.
Key Quotes
“Our forecast for CPI inflation is on the cusp between 2.5% and 2.6% – we have opted for the former as our official forecast (previous 2.4%, the BoE’s view is also 2.5%). With a broadly unchanged wedge that implies an RPI inflation forecast of 3.4% (index level 281.6). We see June’s rise as a temporary blip before a fall back to 2% towards year-end.”
“Producer prices: Our simple model that takes into consideration shifts in oil and commodity prices and sterling suggests a flat reading on input prices in June. Still robust output price readings from the PMI and CBI surveys point to a further 0.2% increase in core output prices – the headline should rise by more owing to higher petrol prices.”
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