April 2018 UK CPI inflation data 23 May 2018

  • UK CPI April 2018 2.4% vs 2.5% exp y/y
  • Prior 2.5%
  • 0.4% vs 0.5% exp m/m. Prior 0.1%
  • Core CPI 2.1% vs 2.2% exp y/y. Prior 2.3%
  • 0.4% vs 0.5% exp m/m. Prior 0.2%
  • RPI 3.4% vs 3.4% exp y/y. Prior 3.3%
  • 0.5% vs 0.5% exp m/m. Prior 0.1%
  • RPI ex- mortgage interest 3.4% vs 3.4% prior y/y
  • 0.5% vs 0.1% prior m/m

ONS notes;

  • Airfares biggest downward contributor to CPI, offset partially by petrol prices
  • Soft drinks prices biggest rise for time of year, but retailers not passing on suger tax yet
  • Core CPI was last lower March 2017, when at 1.8%
  • Output prices m/m & y/y remain the same
  • Input prices up for 2nd month in a row
  • Other manufactured products largest upward contributor to output price
  • Crude oil largest upward contributor to input price
  • Input prices for crude oil rose 19.9% on the year to April
  • Cost of raw materials rose, lifted by strong rise in crude oil

Another drop in inflation and yet another headache for a central bank. The only saving grace is that we’re only seeing minor moves rather than anything bigger. Remember, the BOE target is 2.0% so these numbers aren’t bad. However, if we drop under 2.0%, the problems will arise further regarding hike hopes.

GBP has taken the obvious hit on the numbers. GBPUSD down to 1.3347 from 1.3380. EURGBP has gone back to the days’s highs at 0.8780 from 0.8739. Very choppy.


Ryan Littlestone

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