UK CPI inflation report for May was released this morning with a slight delay to schedule release time (7:00 am BST). Inflation data is always watched closely but this time report drew even more attention as its release came just a day ahead of the Bank of England rate decision (Thursday, 12:00 pm BST). A 25 basis point is fully priced in by markets and widely expected by economists but an upside surprise in inflation data could push BoE members closer to deciding on a 50 bp rate hike.
Actual data showed headline UK CPI inflation staying unchanged at 8.7% YoY. Meanwhile, core CPI accelerated from 6.8 to 7.1% YoY, while market expected it to stay unchanged. This is a very hawkish report and will likely boost market hopes for a bigger than 25 bp rate hike at BoE meeting tomorrow. GBPUSD surged on the news and painted a daily high near 1.28 mark.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appUK inflation data for May
- Headline CPI: 8.7% YoY vs 8.4% YoY expected (8.7% YoY previously)
- Core CPI: 7.1% YoY vs 6.8% YoY expected (6.8% YoY previously)
- Headline PPI: 2.9% YoY vs 3.7% YoY expected (5.4% YoY previously)
GBPUSD surged in response to a hawkish UK CPI report. Pair tested 1.2800 area but has quickly pulled back later on. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
