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MNI UK Inflation Preview: June 2023: Services inflation key

  • The inflation print tomorrow (7:00BST) will be the highlight of the week for UK assets.
  • The majority of the analyst previews that we have read look for headline CPI to fall from 8.7%Y/Y to 8.1%Y/Y – a large portion of this fall is expected to come from automotive fuels.
  • Core inflation is expected to remain sticky – with most analysts expecting a 7.0-7.2%Y/Y print in June, broadly in line with the 7.1%Y/Y print of May.
  • May’s 7.4%Y/Y services inflation helped the MPC agree on a 50bp hike at its June meeting and although none of the analyst previews that we read look for a higher this month, expectations are generally that there are upside risks here. The median of the previews that we read looks for a fall to 7.25%Y/Y.
For the full preview and summary of sellside views, see the PDF below:

UK_CPI_Preview_2023_06.pdf

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