CPI came in at 0.4% m/m in August reducing the year on year figure by 0.1% point to 1.5% y/y. This was lower than we had expected but in line with consensus. The main drivers on the downside were lower prices on fuels and food. This was partly counteracted by higher prices transport services and alcohol. Furthermore, there was recoil in prices on clothing as we expected.
Today’s low inflation numbers support our view that the Bank of England is not in a hurry to hike rates. Our forecast is still a first rate hike in Q2 next year.
Details, CPI Inflation August:
CPI, m/m: 0.4% (Nordea 0.5%%; consensus 0.4%; prior -0.3%)
CPI, y/y: 1.5% (Nordea 1.7%; consensus 1.5%; prior 1.6%)
Nordea