Analysts at TD Securities suggest that last month’s core inflation dip of UK economy looks to have been an unwind of August strength, so they are looking for an unchanged 1.9% y/y core reading (mkt: 1.9%), the 4th such reading in 5 months.
“We expect headline inflation, meanwhile, will rise a tick to 2.5% y/y (mkt: 2.5%, BoE: 2.5%) on the back of stronger energy prices, an effect that should unwind relatively quickly given recent oil moves, leaving inflation trending gradually toward its 2% target.”
“All eyes on Brexit negotiations today. Reports late Tuesday suggest that the deal is agreed in principal now, with UK cabinet and EU ambassador meetings tentatively lined up to give final nods. If a deal is announced, attention will quickly shift to risks of it failing to pass through UK parliament in the next month or so.”