Breaking: UK annualized inflation accelerates by 9.4% in June vs. 9.3% expected
|
- UK CPI climbs by 9.4% YoY in June vs. 9.3% expected.
- Monthly UK CPI arrives at 0.8% in June vs. 0.7% expected.
- GBP/USD remains unfazed around 1.2025 on upbeat UK CPIs.
The UK Consumer Prices Index (CPI) 12-month rate came in at 9.4% in June when compared to 9.1% seen in May while beating estimates of a 9.3% print, the UK Office for National Statistics (ONS) reported on Wednesday.
Meanwhile, the core inflation gauge (excluding volatile food and energy items) eased to 5.8% YoY last month versus 5.9% booked in May, meeting the market forecast of 5.8%.
The monthly figures showed that the UK consumer prices arrived at 0.8% in June vs. 0.7% expectations and 0.7% previous.
Key notes (via ONS):
ONS pointed to a 42% year-on-year rise in petrol prices and an almost 10% increase in food prices as the primary drivers of inflation last month.
Prices paid by British factories for materials and energy - a key determinant of prices later paid by consumers in shops - were 24.0% higher in June than a year earlier, the biggest increase since these records began in 1985.
FX implications:
In an initial reaction to the UK CPI numbers, the GBP/USD pair was largely unchanged above 1.2000.
The pair was last seen trading at 1.2025, up 0.25% on the day. The US dollar retreats amid the upbeat market mood, supporting the pair.
Why UK inflation matters to traders?
The Bank of England is tasked with keeping inflation, as measured by the headline Consumer Price Index (CPI) at around 2%, giving the monthly release its importance. An increase in inflation implies a quicker and sooner increase of interest rates or the reduction of bond-buying by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price rises indicates looser monetary policy. A higher-than-expected result tends to be GBP bullish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.