11 Jul 2014
UK June headline inflation expected to come in at 1.5% - RBS
FXStreet (Łódź) - Ross Walker, Senior UK Economist at RBS predicts that UK inflation data, which will be published next Tuesday, will show a 1.5% in year-on-year CPI, while annual Core CPI should grow by 1.6%.
Key quotes
"BRC data suggest that disinflationary influences persisted in June, with the headline shop price index falling to -1.8% y/y in June from -1.4% in May (the most acute deflation since 2006)."
"Food price inflation was only marginally lower (0.6% y/y from 0.7%) but there was clear evidence of ongoing discounting in a number of ‘core’ CPI categories: clothing (-13.7% from -11.4%, furniture -1.5% from -0.8%, electrical goods 4.0% from -3.1%, books -0.4% from -0.2%)."
"The magnitude of the fall in inflation in the non-food BRC categories is sufficiently large to persuade us to forecast the core CPI rate stabilizing at 1.6% y/y in June (as retailer discounting offsets the upside effects from a rise in airfares)."
"For the CPI food and energy components in June, although petrol prices appear to have risen modestly in June 2014 (c.0.25% m/m) this increase is less than a year ago, so we look for inflation here to fall to -3.0% from -2.5%."
"We expect utility prices to be broadly flat in the month, leaving the % y/y rate largely unaltered."
"Favourable weather effects may yet nudge food price inflation lower, but base effects here are quite challenging."
"Overall, we expect a broadly neutral FBTE impact in June, leaving the headline CPI inflation rate at 1.5%. On all-items RPI we forecast inflation to remain steady at 2.4%."
Key quotes
"BRC data suggest that disinflationary influences persisted in June, with the headline shop price index falling to -1.8% y/y in June from -1.4% in May (the most acute deflation since 2006)."
"Food price inflation was only marginally lower (0.6% y/y from 0.7%) but there was clear evidence of ongoing discounting in a number of ‘core’ CPI categories: clothing (-13.7% from -11.4%, furniture -1.5% from -0.8%, electrical goods 4.0% from -3.1%, books -0.4% from -0.2%)."
"The magnitude of the fall in inflation in the non-food BRC categories is sufficiently large to persuade us to forecast the core CPI rate stabilizing at 1.6% y/y in June (as retailer discounting offsets the upside effects from a rise in airfares)."
"For the CPI food and energy components in June, although petrol prices appear to have risen modestly in June 2014 (c.0.25% m/m) this increase is less than a year ago, so we look for inflation here to fall to -3.0% from -2.5%."
"We expect utility prices to be broadly flat in the month, leaving the % y/y rate largely unaltered."
"Favourable weather effects may yet nudge food price inflation lower, but base effects here are quite challenging."
"Overall, we expect a broadly neutral FBTE impact in June, leaving the headline CPI inflation rate at 1.5%. On all-items RPI we forecast inflation to remain steady at 2.4%."