UK Data Forecasts: August Inflation Data

Repeats Story Initially Transmitted at 10:51 GMT Sep 11/06:51 EST Sep 11

By Jamie Satchithanantham

     LONDON (MNI) - July extended the pause in the rapid rise in prices

witnessed since the UK's vote last year to leave the European Union, when CPI

inflation and core inflation both held firm at 2.6% and 2.4%.

     The driving force behind the July outturn was a fall in fuel prices, down

1.3% between June and July, offset by upward pressure from other categories like

food and household goods.

     A month later and fuel prices will have exerted the opposite effect, having

increased some 1.6% between July and August. With pump prices down 1.4% during

the same period a year ago, it is certain that this category will apply upward

pressure to both CPI and RPI.

     Supplementing this, most suspect the pass through from the weaker currency

still has legs and could translate to higher prices, especially as the cost of

imported materials remains elevated.

     With a rise in CPI Inflation seemingly a dead cert, the only question is by

how much it climbs higher. 

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                          Aug     Aug     Aug       Aug

                          CPI     CPI    CPIH  Core CPI

                        % MoM   % YoY   % YoY     % YoY

Date Out               12-Sep  12-Sep  12-Sep    12-Sep

Median                    0.5     2.7     2.8       2.5

Forecast High             0.6     2.9     2.8       2.6

Forecast Low             -0.1     2.6     2.6       2.3

Standard Deviation        0.2     0.1     0.1       0.1

Count                      12      20       6        13

Prior                    -0.1     2.6     2.6       2.4

ABN Amro                  N/A     2.7     N/A       N/A

Barclays                  0.4     2.7     2.6       2.5

Berenberg                 N/A     2.8     N/A       2.5

BofAML                    0.3     2.6     N/A       2.3

Capital Economics         0.6     2.9     2.8       2.6

Credit Suisse             N/A     2.7     N/A       2.5

Commerzbank               0.4     2.7     N/A       N/A

Daiwa Capital Markets     N/A     N/A     N/A       N/A

HSBC                      0.5     2.8     2.7       2.6

Investec                  0.5     2.8     N/A       2.5

JP Morgan                 N/A     2.7     N/A       2.5

LBBW                      N/A     N/A     N/A       N/A

Lloyds TSB               -0.1     2.6     2.8       2.4

Natixis                   0.3     2.6     N/A       2.4

Nomura                    0.4     2.7     N/A       N/A

Oxford Economics          0.5     2.8     N/A       N/A

Pantheon                  N/A     2.8     N/A       N/A

RBC                       0.5     2.8     2.7       N/A

Scotia                    N/A     2.8     N/A       N/A

Standard Chartered        N/A     2.7     N/A       2.5

Societe Generale          0.6     2.8     2.8       2.5

UniCredit                 N/A     2.7     N/A       2.4

     The MNI median of 19 analyst forecasts points to a 0.1pp rise in CPI to

2.7%, 0.2pp shy of May's 5-year high. Core inflation is also seen rising by a

percentage point, up to to 2.5%, while CPIH (re-designated as a national

statistic on July 31) is expected to rise 0.2pp to 2.8%.   

     Meanwhile, RPI is expected to climb to 3.8% in August from 3.6% in July.

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                          Aug     Aug     Aug

                    RPI Index     RPI     RPI

                        Value   % MoM   % YoY

Date Out               12-Sep  12-Sep  12-Sep

Median                  274.1     0.6     3.8

Forecast High           274.4     0.6     3.9

Forecast Low            272.9     0.4     3.6

Standard Deviation        0.6     0.1     0.1

Count                       5       8      10

Prior                   272.9     0.2     3.6

Barclays                274.3     0.5     3.7

BofAML                  274.0     0.4     3.6

Capital Economics         N/A     0.6     3.8

Investec                  N/A     0.6     3.8

JP Morgan               274.1     N/A     3.7

Lloyds TSB              272.9     0.6     3.8

Nomura                    N/A     0.6     3.8

Oxford Economics          N/A     0.4     3.6

RBC                     274.4     0.6     3.8

Scotia                    N/A     N/A     3.9

     Input price inflation has stabilised somewhat in the last few months,

falling back to 6.5% in July having peaked at 19.9% earlier this year, as the

impact of the weakened sterling has gradually dissipated away. 

     In August, however, the stabilisation may have suffered a temporary

setback, courtesy of a higher oil and commodity (in particular, metal) prices.

     Oil prices were rose 6% between July and August with the price of a barrel

up to stg40 from stg38 a month before. Metal prices, meanwhile, were up for the

third consecutive month in August.   

     After falling sharply form 10% in June to 6.5% in July, analysts see the

rate edging back up 7.6% in August. This rise in input prices is likely to be

consistent with a marginal rise in output prices. Factory gate prices are

expected to come in up 0.2% m/m for a 3.1% change on the year.        

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                          Aug        Aug         Aug         Aug

                    PPI Input  PPI Input  PPI Output  PPI Output

                        % MoM      % YoY       % MoM       % YoY

Date Out               12-Sep     12-Sep      12-Sep      12-Sep

Median                    1.3        7.6         0.2         3.1

Forecast High             1.5        7.8         0.3         3.3

Forecast Low              0.5        6.7         0.1         3.1

Standard Deviation        0.4        0.5         0.1         0.1

Count                       6          5           6           5

Prior                     0.0        6.5         0.1         3.2

Capital Economics         1.0        7.0         0.2         3.1

Investec                  1.3        7.6         0.1         3.1

Lloyds TSB                1.4        7.7         0.2         3.2

Nomura                    1.5        7.8         0.3         3.3

Oxford Economics          0.5        6.7         0.2         3.1

Pantheon                  1.2        N/A         0.2         N/A

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com