UK August CPI +6.7% vs +7.0% y/y expected

<ul><li>Prior +6.8%</li><li>Core CPI +6.2% vs +6.8% y/y expected</li><li>Prior +6.9%</li></ul><p>It is softer readings across the board, as even the monthly estimates are a miss on expectations. In August, headline inflation moved up by just 0.3% (vs 0.7% estimate) on the month and the lower figures are weighing on the pound as well as bond yields upon release. The good news for the BOE is that food prices are seen falling further and faster, which is the main reason why core prices are also down significantly on the month. This will feed further into a case of <a href="https://www.forexlive.com/news/one-last-rate-hike-for-the-boe-this-week-20230919/" target="_blank" rel="follow">one last rate hike for the BOE</a> before pausing.</p><p>Cable has fallen from around 1.2385 to 1.2340 levels currently with the pair now susceptible to a drop towards the May lows of 1.2387-95 next.</p>

This article was written by Justin Low at www.forexlive.com.