UK: Upward bias expected in the August CPI inflation - Rabobank

Piotr Matys, EM FX Strategist at Rabobank, suggests that an upward bias is expected in the UK August CPI inflation release.

Key Quotes

“It is possible that the post referendum plummet in sterling may be responsible for driving higher some import sensitive parts of the index though it may be still too early to the see the full effect.

The fact that fuel prices dropped last month should constrain the month-on-month rate. However, since the fall did not match the tumble recorded a year ago, this will still feed into a higher year-on-year number. The market consensus stands at 0.4% m/m, 0.7% y/y with core inflation expected to rise to 1.4% y/y.”