UK: Disinflationary data flow: Core CPI, AWE & retail sales - RBS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Ross Walker, Senior UK Economist at RBS, suggests that the inflation data take centre stage in the UK in this week.

    Key Quotes

    “We forecast headline CPI inflation to edge up to 0.3% from 0.2%, but only as a result of base effects which will soon dissipate. The more informative core CPI rate is forecast to fall back to 1.2% in January. On our forecast headline CPI inflation will remain below its 2% target until into H2 2018.

    Wage inflation is set to fall further, to 1.8% 3m y/y, a combination of base effects and muted new pay settlements/bonuses. The BoE cut its 2016 AWE growth projections (to 3% y/y from 3¾% at end-2016) but even this risks being too high.

    Separately, keep an eye out for any UK EU referendum announcement on the afternoon of Friday 19th – a deal seems likely, allowing a late-June 2016 referendum.”
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