Core CPI Extends Slide as Headline Hits BOE.>

UK DATA: Core CPI Extends Slide as Headline Inflation Hits BOE Target

-UK May CPI +2.0% y/y vs +2.1% in April

-UK May Core CPI +1.7% y/y vs +1.8% in April

-UK May RPI +3.0% y/y, unchanged from April 

-------------------------------------------------------------------------------------------------------

CPI fell back to the Bank of England's target of 2.0% in May, while 

core inflation retreated to 1.7%, slightly ahead of the MNI median 

forecast of a 1.6% rise. News of the modest easing in price pressures 

comes as the Monetary Policy Committee meets ahead Thursday decision. 

Markets have largely dismissed warnings from Governor Mark Carney and 

Chief Economist Andy Haldane about the risk of a rate hike once Brexit 

uncertainty clears. However, the continued retreat in core inflation to 

its lowest level since January of 2017 may precipitate some intense 

deliberations at this week's gathering, particularly with the BOE 

predicting a slowdown in GDP growth to 0.2% in Q2 from 0.5% Q1.