UK: Downside risks to the June inflation report - TDS

Research Team at TDS, sees downside risks to the June inflation report, with headline inflation decelerating to 0.2% while core inflation softens to 1.1% (consensus: 0.4% and 1.3% respectively).

Key Quotes

“Price surveying was conducted prior to the EU Referendum date, and while sterling depreciation has been steady since November of last year, it’s likely that at this point many retailers were still holding off on any exchange rate-driven boost to prices on the assumption that Remain would win and the currency rebound. Continued referendum uncertainty would have also created a challenging environment for retailers to pass on any possible cost increases, so we look for soft gains on a monthly basis.”