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MNI UK Inflation Preview - October 2024

Utilities prices to increase headline CPI, but services expected stable - we discuss the upside risks.
HomepageInflation InsightCEEMEAUKMarketsStory
MNI (LONDON)
  • After reaching its near-term trough in September, UK CPI is expected to increase in October, largely driven by utilities prices, but the main focus will remain on services inflation which is expected to remain broadly unchanged.
  • Consensus expects the more important services CPI to print broadly around the same level as in September (MNI median 4.9%, MNI mean 4.91%, Bloomberg consensus 4.9%, BOE 4.97%). We remain wary of upside risks from air fares.
  • We also see the potential for moves higher in clothing and second hand car prices within core goods.
  • A decent surprise either way in services CPI could move the market, but if the upside risks that we have identified prevail to see a higher-than-consensus print we still think there is scope for cuts at least in February and May (which aren’t quite fully priced by the market yet). We therefore think there is potential for a bigger market move on a downside surprise.

For the full MNI preview click here: UK_Inflation_Preview_2024_11_Release.pdf

 

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MNI (LONDON)
  • After reaching its near-term trough in September, UK CPI is expected to increase in October, largely driven by utilities prices, but the main focus will remain on services inflation which is expected to remain broadly unchanged.
  • Consensus expects the more important services CPI to print broadly around the same level as in September (MNI median 4.9%, MNI mean 4.91%, Bloomberg consensus 4.9%, BOE 4.97%). We remain wary of upside risks from air fares.
  • We also see the potential for moves higher in clothing and second hand car prices within core goods.
  • A decent surprise either way in services CPI could move the market, but if the upside risks that we have identified prevail to see a higher-than-consensus print we still think there is scope for cuts at least in February and May (which aren’t quite fully priced by the market yet). We therefore think there is potential for a bigger market move on a downside surprise.

For the full MNI preview click here: UK_Inflation_Preview_2024_11_Release.pdf