CPI To Moderate On Unwind Of Transitory.....>

UK DATA: CPI To Moderate On Unwind Of Transitory Factors: For September,

analysts look for a 0.1pp moderation from August's 2.7% 12-month rate to 2.6%

and see core inflation falling by the same margin to 2.0%.

- MNI's 'hit/miss analysis' shows analysts have found it hard to call headline

inflation in September. Since 2008, they have correctly projected the rate just

three times, overestimating it three times (average data surprise: -0.17pp) and

underestimating it four times (average data surprise: +0.18pp). 

- Services Inflation Set to Moaderate. Base effects imply that annual inflation

rates for a number of items in the CPI basket - especially services such as

recreation & culture and transport - will have cooled in September.

- Food Inflation Set to Ease Too. Given that food inflation jumped 0.8% m/m in

September 2017, its largest September rise in ten years, the annual rate

probably moderated last month.

- Fuel prices to detract 0.08pp from CPI.

- Utility Hikes to Exert Upward Pressure.