CPI Steady at BoE Target, Core Inflation....>

UK DATA: CPI Steady at BoE Target, Core Inflation Edges Higher

-UK June CPI +2.0% y/y vs +2.0% in May

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

-UK June RPI +2.9% y/y vs +3.0% y/y in May

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CPI steadied at the BoE's target in June, in line with both projections 

in the May QIR and MNI's survey median. Core CPI edged higher, with 

clothing and footwear adding 0.08 percentage points to the change in 

CPI. The upward contribution was largely due to a base effect, after 

unusually-aggressive discounting in June 2018. The outturn is consistent 

with MPC members' conclusion that headline CPI will remain "around the 

2% target," before falling below that level in the current quarter. The 

benign inflationary outlook raises further questions over the Bank's 

suggestions that interest rates could rise over the medium term, 

particularly with pipeline inflation falling.