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  • UK CPI rises 0.4% YoY in Feb vs. +0.8% expected.
  • Monthly UK CPI arrives at +0.1% in Feb vs. +0.5% expected.
  • GBP/USD remains unfazed by the downbeat data but defends 1.3700.

The UK Consumer Prices Index (CPI) 12-month rate came in at +0.4% in February when compared to +0.7% booked in January while missing expectations of a +0.8% print, the UK Office for National Statistics (ONS) reported on Wednesday.  

Meanwhile, the core inflation gauge (excluding volatile food and energy items) dropped to +0.9% YoY last month versus +1.4% booked in January, missing the consensus  forecast  of +1.4% by a big margin.

The monthly figures showed that the UK consumer prices arrived at +0.1% in February vs. +0.5% expectations and -0.2% prior.

Main points (via ONS):

“The largest upward contribution to the CPIH 12-month inflation rate came from transport (0.30 percentage points).”

“Falling prices for clothing, second-hand cars, and games, toys and hobbies resulted in the largest downward contributions to the change in the CPIH 12-month inflation rate between January and February 2021.”

“These were partially offset by large upward contributions from rising prices for motor fuels, and housing and household services overall.”

FX implications:

Following the downbeat UK  CPI  numbers, the GBP/USD  pair held onto its losses above 1.3700 amid a broadly firmer  US dollar.

The spot was last seen trading at 1.3710, down 0.29% on a daily basis.