The BOE's preferred measure CPIH was unchanged at 2.8% and the headline and core CPI were also unchanged at 3.0% and 2.7%, respectively, even as the BOE and the market had expected a small rise, points out the research team at BBH.
“The unchanged report means that BOE Governor Carney does not have to write a letter to the Chancellor to explain the overshoot, which is not more than one percentage point. Although we expect UK inflation to peak here in Q4, it is not clear with today's report that this is it. That fact that food prices rose 4.2% year-over-year, the most in four years, seems to still reflect the echo of sterling's decline from last year.”
“Sterling is trading in the lower end of yesterday's range and has been confined to about a quarter a cent on either side of $1.31. On the other hand, the euro has pushed a bit through GBP0.8950 to reach its best level since October 26.”
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