UK: Upside surprise in CPI numbers - TDS

Sandeep Kanihama FXStreet Contributor

Analysts at TD Securities note that the UK CPI surprised to the upside with the headline rising from 2.5% y/y to 2.7% and core up from 1.9% to 2.1% y/y, both bucking the consensus for a slight deceleration.

Key Quotes

“The details showed a second month of unseasonably strong recreation prices, which instead of mild deflation that is usual in the summer months rose 0.6% m/m in both July and August.”

“Clothing prices also didn't show any downside distortions from the warmer weather. It is unclear whether the recent strength in recreation will reverse in the coming months, but given the broader strength in the details, it seems likely we could continue to run a bit above the 2.5% y/y the BoE has forecast for CPI through September.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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