Rabobank analysts point out that the UK CPI is expected to print 2.0% and 1.8% for the headline and the core measure, respectively.
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“A negative surprise due to lower fuel prices is however possible and this would push the headline measure just below the Bank’s official 2%-target. However, the 3+% growth seen in the wage numbers combined with a weak productivity record should eventually continue to produce some domestically generated price pressures, keeping the MPC on edge.”