UK inflation surges into double digits
UK annualised CPI missed the forecast of 9.8%, coming in at 10.1%. This inflation reading is the highest since the 1980s (based on CPI models), with the rise being broad-based and upside pressure from every significant category. However, it was food inflation that contributed the most to the miss.
This print comes after the BoE's monetary policy statement of August 4 warned, "CPI inflation is expected to rise ... just over 13% in 2022 Q4, and to remain at very elevated levels throughout much of 2023." In response, the yield on the 2-yr gilt jumped to 2.37%.
We expect the BoE to deliver another 50bps hike on September 15, taking the bank rate to 2.25%.
Image by Gerd Altmann from Pixabay
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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