UK: Headline CPI is forecast to remain at 0.3% in June - RBS

Research Team at RBS, suggests that the UK’s headline CPI is forecast to remain at 0.3% in June, reflecting a stable Core CPI rate and a broadly neutral combined food & energy contribution.

Key Quotes

“FBTE: we expect a modest upside impact from energy, a marginal downside influence from food.

Core CPI inflation f/cast to remain at 1.2% in June. Wage pressures remain subdued and Brexit may have dampened consumer demand (big-ticket items).

Utility prices are forecast to be flat in June, leaving the y/y rate barely altered at -3.6%.

Petrol prices are expected to show a 2.0% m/m rise in June, raising the y/y rate to -5.7% from -6.8% (adding 0.04pp to CPI).

Food price inflation is forecast to be little altered in June: -2.9% (y/y) from -2.8%.

Higher energy prices outweigh mild disinflationary trends in food, leaving overall FBTE inflation fractionally higher: -2.7% in June from -2.8% in May.”