UK: CPI inflation in No-Man’s land – RBS

By FXStreet Ross Walker, Senior UK Economist at RBS, expects the UK CPI inflation in April to show a partial unwinding of the airfare and Easter related rise in March.

Key Quotes

“The headline rate will continue to be suppressed by (largely global) energy and food deflationary influences, while Core CPI is expected to remain in something of a No-Man’s Land: sufficiently far above deflationary territory to obviate the need for any early Bank Rate cuts (barring a ‘Leave’ vote) but far enough below target to augur against any pre-emptive monetary policy tightening.

Inflation rose surprisingly sharply in March, propelled by soaring airfares and what appears to be Easter-related price stickiness. We expect some of these influences to unwind in April, nudging the Core CPI rate down to 1.4% and the headline rate down to 0.4% – the latter appears to be less assured than the former given some modest upward energy (petrol) and food price inflation pressures.”
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Source:: FX Street