Headline annual inflation was unchanged in May at 8.7%, beating estimates, but core annual inflation is seen jumping again to above 7% and here’s how that looks:
UK core CPI y/y (%)
Food prices continue to stay elevated with the annual reading seen up by 18.4%, just slightly down from the 19.2% reading in March – which was the highest in over 45 years.
The report continues to mount further pressure on the BOE to act and markets might be feeling more confident to start to look for 6% rates if this keeps up.