No big surprises in the headline inflation numbers coming from Britain: 0% change y/y and +0.2% m/m. Also core CPI came in as expected at 1% y/y and the RPI beat with 1.1% instead of 0.9%.
Perhaps the lack of surprises puts the focus on the second tier RPI, and GBP/USD is on the rise. The pair above 1.5450, a gain of around 20 pips from previous levels.
The UK was expected to report no change in prices y/y: CPI at 0% for August, after +0.1% in July. Month over month a gain of 0.2% was on the cards, after a drop of the same scale beforehand.
GBP/USD traded around 1.5440 towards the publication, trading in a somewhat choppier manner than earlier in the day.
More data:
- Core CPI carried expectations for a rise of 1% after seeing 1.2% in July. Actual: 0%
- The Retail Price Index (RPI) was expected to rise 0.9% y/y after 1% beforehand. Actual: 1.1%.
- PPI Input was expected to drop 2.3% m/m. Actual -2.4%.
- PPI Output exp. -0.2%. Actual: -0.4%.
- The House Price Index (HPI) was expected to print an annual rise of 6.2%. Actual 5.2%.
The Bank of England’s next move is to raise rates, but this may certainly take quite some time, especially if we look to inflation numbers. The rise in jobs hasn’t boosted core inflation and headline inflation still suffers from lower commodity prices.
Tomorrow we have another important event: the release of jobs numbers. See how to trade the UK average earnings index with GBP/USD.
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