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UK CPI July expected to lift headline inflation, core steady near 2.5%

Forexlive says headline UK inflation is expected to rebound to 2.9% in July as energy price effects, including the Ofgem price cap for Q3, boost the reading.

Reported · Written up by our desk · Economy

ForexLive highlights the European economic calendar, with UK CPI set to be the main market focus and the Eurozone CPI release expected to be less of a mover because it is the final estimate for July.

The outlet expects UK headline annual inflation to rebound from June’s 2.6% low to 2.9% in July, with core annual inflation dipping slightly to 2.5% from June’s 2.6%.

Forexlive attributes the rise in headline inflation to swings in energy prices, pointing to the Ofgem price cap increase for Q3 as a likely contributor. Services inflation is expected to stay relatively sticky, with a decline to 3.4% in July from 3.6% in June.

The piece also notes that, barring major surprises, the data should not materially change the Bank of England’s outlook. It adds that traders are pricing in about 78% odds of no change for September, while expectations for a September rate hike have firmed to around 91%.

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