July 20, 2022
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UK: Inflation Focusing on Food Again

  • UK inflation was a tenth above forecast as it rose to 9.4% and 11.8% on the CPI and RPI, with the news concentrated on food prices such that the “core” was as expected.
  • We extend the upside trend in food prices, bolstering the forecast, but keeping it relatively flat until 2023 outside the Oct-22 energy-related increase.
  • The BoE says it focuses on evidence of increased inflation persistence rather than its spot prints. Underlying measures eased again in June, albeit staying too high.

By Philip Rush

July 19, 2022
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EA: Underlying Inflation Falling Past Peak

  • EA HICP inflation was unrevised from 8.64% in the final print for Jun-22, and the HICPxT rose to 8.8% y-o-y, in line with our forecast.
  • The outlook for the next few months still looks relatively flat, albeit at painfully high inflation rates. The current consensus forecast profile is very similar to ours.
  • Underlying inflation appears to have peaked, with the monthly impulse broadly falling over the past two months. It is still running at about double target-consistent rates.

By Philip Rush

July 01, 2022
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EA: Inflation Trend Stays for Summer

  • EA inflation continued its trend with another 0.6pp rise to 8.64% in June-22. The surprise pressures are moving back from the core components to energy and food.
  • Despite the upside headline surprise, Germany undershot our already low forecast, but Spain was beyond even our distant high view. Other countries skew to the upside.
  • We now forecast a more substantial increase in July to 8.9%, extending the trend further into the summer. The ECB has already committed to responding.

By Philip Rush