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MNI UK Data Preview - October 2023 Release: Inflation / Wage Data

  • This week will see the partial release of labour market data as well as the release of September CPI. These data are both their last respective readings ahead of the November Monetary Policy Report.
  • In our view, MPC speakers (particularly Huw Pill) have recently been trying to reduce the market impact to individual data releases by pointing to a greater array of data as being of importance for monetary policy and noting that the short-term focus of monetary policy will hopefully be coming to an end as inflation starts to fall back and the labour market becomes less tight.
  • Based on the previews that we have read, headline inflation is expected to fall to 6.6%Y/Y (from 6.7% in August) with core CPI falling two tenths to 6.0%Y/Y while services CPI stays steady at 6.8%Y/Y.
  • The balance of risks to the September inflation print seems to be towards a higher print given the weakness in airfares and accommodation prices seen in the August data.
  • We will still receive the wage data and the PAYE data this week. The Bank of England had previously emphasised the importance of private sector regular pay (i.e. ex-bonuses). However, the September MPC report started to point towards other wage measures and other measures of labour tightness.
For the full document including summaries of sellside forecasts see the PDF here.

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