- 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.
