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  • UK CPI rises by 2.1% YoY in May vs. +1.8% expected.
  • Monthly UK CPI arrives at +0.6% in May vs. +0.3% expected.
  • GBP/USD rises by a few pips to test 1.4100 on upbeat UK CPIs.

The UK Consumer Prices Index (CPI) 12-month rate came in at +2.1% in May when compared to +1.5% booked in April while beating expectations of a +1.8% print, the UK Office for National Statistics (ONS) reported on Wednesday.  

Meanwhile, the core inflation gauge (excluding volatile food and energy items) rose by 2.0% YoY last month versus +1.5% registered in April, matching the consensus  forecast  of +1.5%.

The monthly figures showed that the UK consumer prices arrived at +0.6% in May vs. +0.3% expectations and +0.6% prior.

Main points (via ONS):

“Rising prices for clothing, motor fuel, recreational goods (particularly games and recording media), and meals and drinks consumed out resulted in the largest upward contributions to the change in the CPIH 12-month inflation rate between April and May 2021.”

“These were partially offset by a large downward contribution from food and non-alcoholic beverages, where prices fell this year but rose a year ago, particularly for bread and cereals.”

FX implications:

In an initial reaction to the upbeat UK  CPI  numbers, the GBP/USD  pair popped a few pips to test the 1.4100 level.

The spot was last seen trading at 1.4095, higher by   0.13% on the day.