UK annualized CPI beats estimates with 0.7% in Sept, GBP/USD keeps gains

UK CPI rises 0.7% YoY in Oct vs. +0.6% expected.
Monthly UK CPI arrives at 0% in Oct vs. -0.1% expected.
GBP/USD keeps gains around 1.3265 on the data release.

Dhwani Mehta FXStreet

The UK Consumer Prices Index (CPI) 12-month rate came in at +0.7% in October when compared to +0.5% booked in September while beating expectations of a +0.6% print, the UK Office for National Statistics (ONS) reported on Wednesday.

Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at +1.5% YoY last month versus +1.3% booked in September while meeting the consensus forecast of +1.3%.

The monthly figures showed that the UK consumer prices arrived at 0% in Sept vs. -0.1% expectations and +0.4% prior.

Main points (via ONS):

“The largest contribution to the CPIH 12-month inflation rate in October 2020 came from recreation and culture (0.26 percentage points).”

“Clothing; food; and furniture, furnishings and carpets made the largest upward contributions (with the contribution from these three groups totalling 0.16 percentage points) to the change in the CPIH 12-month inflation rate between September and October 2020.”

“These were partially offset by downward contributions of 0.06 and 0.04 percentage points, respectively, from the recreation and culture, and transport groups.”

FX implications:

Following the upbeat UK CPI numbers, the GBP/USD pair kept its bid tone intact above 1.3250.

The spot was last seen trading at 1.3264, up 0.18% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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