Prior +2.6percentCore CPI +3.8% vs +3.6% y/y expectedPrior +3.4percentServices CPI +5.4% vs +4.8% y/y expectedPrior +4.7%
Huge upside shock for UK inflation. The market will definitely reprice the speed reduce expectations to one thing like 25-28 bps of easing by year-end (one price reduce) and even then I am skeptical the BoE will be capable to reduce once more in 2025.
That is the danger I have been speaking about in the previous few weeks. It is not progress, it is inflation now. And that can possible be the identical for the ECB and the Fed.
This text was written by Giuseppe Dellamotta at www.forexlive.com.
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