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UK CPI eases to 2.6% as core inflation stays at 2.6%
Core CPI held at 2.6% year over year, with services inflation edging down to 3.6% from 3.7%, tempering expectations for near term BoE rate cuts.
UK inflation cooled further in June, with headline CPI slowing to 2.6% year over year from 2.8%, according to Action Forex, and below the 2.7% forecast.
Monthly CPI rose 0.1% month over month, matching expectations, and the report also continued the broader disinflation trend despite volatile energy conditions tied to heightened geopolitical tensions.
However, the core CPI reading was more resilient, staying at 2.6% year over year and topping expectations for slight easing to 2.5%. Goods inflation slowed further to 1.7% from 2.0%, while services inflation declined modestly to 3.6% from 3.7%.
Action Forex said the data is unlikely to change the Bank of England’s policy outlook materially, since softer headline inflation supports disinflation while the core inflation upside surprise should temper hopes of decisive progress on underlying price pressures.