UK CPI expected to edge lower to 1.9% in July - RBS

FXStreet (Łódź) - Ross Walker, Senior UK Economist at RBS expects UK core inflation to slide to 1.9% in July from 2.0% in June, due to some upside shocks in June reversing heavier summer sales discounting.

Key quotes

"CPI inflation is forecast to fall to 1.8% in July from 1.9% in June, reflecting the lower core rate and marginal drag from food & energy."

"Petrol prices are forecast to rise by 0.35% m/m, leaving the y/y rate barely altered at -3.1% and, therefore a neutral impact on inflation."

"Utility prices are forecast to be flat in the month, in line with the recent trend, nudging the y/y rate down marginally (4.7% from 5.0%)."

"Food price inflation in July is forecast to be marginally lower at -0.1% y/y (downside pressure in the month largely neutralised by base effects)."

"Overall FBTE inflation is forecast to edge down to 1.3% in July from 1.5% in June."

"RPI inflation is forecast to stabilise at 2.6% in July; RPIX at 2.7%."