Breaking: GBP/USD drops below 1.3000 as UK annualized CPI misses estimates with +1.3%

  • UK CPI rises 1.3% YoY in December vs. +1.5% expected.
  • UK CPI arrives at 0.0% MoM in December vs. +0.2% expected.

The UK Consumer Prices Index (CPI) 12-month rate came in at +1.3% in December, when compared to +1.5% booked in November while bettering expectations of a +1.5% 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 +1.7% booked in Nov while way below the consensus forecast of +1.7%.

The monthly figures showed that the UK consumer prices arrived at 0.0% in Nov, missing +0.2% expectations and -0.2% last.

Main Points (via ONS):

“The largest contribution to the CPIH 12-month inflation rate in December 2019 came from housing, water, electricity, gas and other fuels (+0.36 percentage points).

The largest downward contributions to the change in the CPIH 12-month inflation rate between November and December 2019 came from accommodation services and clothing.”

FX Implications:

On the UK CPI disappointment, the GBP/USD pair dropped nearly 30-pips to 1.2990, losing 0.18% on the day.

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