- UK CPI rises 9.4% yoy in June, vs. 9.3% expected.
- UK monthly CPI rises 0.8% in June vs. 0.7% expected.
The UK Consumer Price Index (CPI) stood at 9.4% yoy in June, down from 9.1% in Mayand above estimates of 9.3%, the UK Office for National Statistics (ONS) reported on Wednesday.
On the other hand, the inflation indicator Core CPI (which excludes food and energy volatility) fell to 5.8% yoy last month, down from 5.9% in Maymeeting the market forecast of 5.8%.
Monthly figures showed UK consumer prices rose 0.8% in June, versus 0.7% expected and 0.7% previously.
Key notes (via ONS):
The ONS noted a 42% year-over-year increase in gasoline prices and a nearly 10% increase in food prices as the main drivers of inflation last month.
Prices Paid by British Factories for Materials and Energy (a key determinant of the prices consumers then pay in stores) were 24.0% year-on-year in Junethe largest increase since these records began in 1985.
Why is UK inflation important to investors?
The Bank of England is tasked with keeping inflation, as measured by the main Consumer Price Index (CPI), at around 2%, which gives the monthly release its importance. An increase in inflation implies an increasingly rapid increase in interest rates or the reduction of the purchase of bonds by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price increases indicates looser monetary policy. A higher than expected result tends to be bullish for the GBP.
Source: Fx Street
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