- UK CPI rises by 2.0% YoY in July vs. +2.2% expected.
- Monthly UK CPI arrives at 0% in July vs. +0.3% expected.
- GBP/USD holds steady around 1.3740 on downbeat UK CPIs.
The UK Consumer Prices Index (CPI) 12-month rate came in at +2.0% in July when compared to +2.5% recorded in June while missing expectations of a +2.2% print, the UK Office for National Statistics (ONS) reported on Wednesday.
Meanwhile, the core inflation gauge (excluding volatile food and energy items) fell to 1.8% YoY last month versus +2.3% registered in June, falling short of the consensus forecast of +2.2%.
The monthly figures showed that the UK consumer prices arrived at 0% in July vs. +0.3% expectations and +0.5% prior.
Main points (via ONS):
“The largest upward contribution to the CPIH 12-month inflation rate came from transport (0.85 percentage points).”
“CPIH was unchanged on the month in July 2021, compared with a rise of 0.4% in July 2020.
“Clothing and footwear, and a variety of recreational goods and services made the largest downward contributions to the change in the CPIH 12-month inflation rate between June and July 2021.”
“Price rises for second-hand cars, compared with falls a year ago, resulted in the largest, partially offsetting, upward contribution to change.”
FX implications:
In an initial reaction to the downbeat UK CPI numbers, the GBP/USD pair extended the retreat towards 1.3700.
The spot was last seen trading at 1.3735, almost unchanged on the day.
