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UK Preliminary Data Forecasts: July UK Inflation Data

MNI (London)
By Jamie Satchithanantham
     LONDON (MNI) - Despite slowing in June, the general consensus is that the
upward march of UK inflation still has some legs and CPI could even reach 3.0%
before the close of the year. July could have seen its upward march resume.
     Falling to 2.6% in June from 2.9% in May, CPI inflation recorded its first
decline in eight months, courtesy of a drop in motor fuel prices and selected
recreational goods and services. 
     Like June, motor fuel prices look set to weigh on the inflation numbers
again in July along with clothing and footwear items which traditionally are on
promotion during the summer months. 
     Upward pressure will be exerted from rising utility prices, off the back of
a 7.2% price hike from energy supplier EDF Energy.
     Despite talk of CPI potentially hitting 3.0% before the end of the year it
appears the rise in prices may have to wait until the August data is published.
Of the eight analysts polled to date, five see CPI holding firm at 2.6% with the
other two seeing inflation edge up to 2.7% and 2.8%, respectively. Likewise, RPI
inflation is expected to have moved sideways, unchanged at 3.5% y/y in July.   
     Input price inflation is seen to have weakened in July, falling from 9.9%
y/y to the MNI median of 6.6% y/y. Factory gate prices are also though to have
moderated though by not as much. Output price inflation is expected to have
slowed by 0.1pp to 3.2% y/y.     
------------------------------------------------------------
                       Jul     Jul       Jul     Jul     Jul
                       CPI     CPI  Core CPI     RPI     RPI
                     % MoM   % YoY     % YoY   % MoM   % YoY
Date Out            15-Aug  15-Aug    15-Aug  15-Aug  15-Aug
Median                -0.1     2.6       2.4     0.1     3.5
Forecast High          0.0     2.8       2.5     0.1     3.6
Forecast Low          -0.1     2.6       2.3    -0.1     3.3
Standard Deviation     0.0     0.1       0.1     0.1     0.1
Count                    6       7         3       5       6
Prior                  0.0     2.6       2.4     0.2     3.5
Capital Economics     -0.1     2.6       2.3     0.1     3.5
Credit Suisse          N/A     2.7       2.5     N/A     N/A
Commerzbank           -0.1     N/A       N/A     N/A     N/A
Investec              -0.1     2.6       2.4     0.1     3.5
Nomura                 0.0     2.6       N/A     0.1     3.5
Oxford Economics      -0.1     2.6       N/A    -0.1     3.3
RBC                   -0.1     2.6       N/A     0.1     3.5
Scotia                 N/A     2.8       N/A     N/A     3.6
     Official year-over-year input price inflation slowed for the fifth
consecutive month in June, falling to 9.9%. It had been as high as 19.9% in
January. While this does depict the gradual pass through of the currency fall,
the lag between lower input and output prices means that the fall in the latter
has been less pronounced.
     Output price inflation fell to 3.3% y/y in June, the lowest since last
December, but core factory gate prices did edge up to +2.9% y/y -- last higher
all the way back in September 2011.
----------------------------------------------------------------
                          Jul        Jul         Jul         Jul
                    PPI Input  PPI Input  PPI Output  PPI Output
                        % MoM      % YoY       % MoM       % YoY
Date Out               15-Aug     15-Aug      15-Aug      15-Aug
Median                    0.2        6.6         0.1         3.2
Forecast High             0.5        7.0         0.2         3.3
Forecast Low             -0.5        5.9        -0.2         2.9
Standard Deviation        0.5        0.5         0.2         0.2
Count                       4          4           4           4
Prior                    -0.4        9.9         0.0         3.3
Capital Economics         0.5        7.0         0.2         3.3
Investec                  0.4        6.8        -0.2         2.9
Nomura                    0.0        6.4         0.1         3.2
Oxford Economics         -0.5        5.9         0.1         3.2
     This survey will be updated Monday August 14. 
--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com
[TOPICS: MTABLE,MABDT$,M$B$$$,M$E$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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