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UK August CPI Preview (release 0700BST 16/9/20)

UK DATA

CPI: BBG: -0.6% m/m, +0.1% y/y; Prev (Jul) +0.4% m/m, +1.0%y/y

Core CPI: BBG: +0.6% y/y; Prev (Jul) 1.8% y/y

CPIH: BBG: +0.3% y/y; Pre(Jul) +1.1% y/y

  • Annual inflation is forecast to decelerate to 0.1% in August, down from 1.0% in July.
  • This would mark the lowest level since October 2015 when the annual CPI was -0.1%.
  • Core inflation is projected to plunge by 1.2pp to 0.6% in August, its lowest since March 2001.
  • Two of the government's policies, the VAT cut for the hospitality sector and the "Eat out help out" scheme, are likely to have a downward effect on inflation figures in August.
  • Moreover, the BRC's shop price index also reported an annual decline of shop prices in August, mainly driven by non-food products due to continued promotions to enhance sales.
  • Aug's services PMI noted that average prices charged remained unchanged which suggested a continued squeeze of margins.
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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