UK CPI inflation likely to rebound 0.4%(YoY) in May – Wells Fargo

Analysts at Wells Fargo, expects today’s release of UK CPI inflation for the month of print to show an increase of 0.4% (Year-over-Year) in line with the market consensus.

Key Quotes

“The British government mandates the Bank of England to hit an inflation target of 2 percent in the medium term. In that regard, the overall rate of CPI inflation has been below target for two years. Part of the undershoot in the overall rate of inflation reflects the collapse in energy prices. However, there are few inflationary pressures in the economy as illustrated by 1.2 percent core rate of inflation currently. CPI inflation data for May will print on Tuesday.

Growth in real retail spending slowed earlier this year, but the year-over-year rate rebounded to 4.3 percent in April. Data on retail spending are on the docket on Thursday. The Bank of England holds its monthly policy meeting on Thursday as well, but there is little chance that the Monetary Policy Committee (MPC) will make a move next week. That said, the MPC could very well cut rates in coming months if the United Kingdom votes on June 23 to leave the European Union.”