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Economic news
18.09.2024

European session review: GBP gains, following UK’s August inflation report

TimeCountryEventPeriodPrevious valueForecastActual
06:00United KingdomHICP, Y/YAugust2.2%2.2%2.2%
06:00United KingdomHICP ex EFAT, Y/YAugust3.3%3.5%3.6%
06:00United KingdomHICP, m/mAugust-0.2%0.3%0.3%
09:00EurozoneHarmonized CPI, Y/YAugust2.6%2.2%2.2%
09:00EurozoneHarmonized CPI ex EFAT, Y/YAugust2.9%2.8%2.8%
09:00EurozoneHarmonized CPIAugust0%0.2%0.1%


GBP advanced against most of its major rivals in the European session on Wednesday as the UK consumer price index demonstrated growth of 2.2% YoY, in line with economists’ expectations, adding to bets on an additional rate cut by the Bank of England later this year.

The Office for National Statistics (ONS) reported the British CPI increased 2.2% YoY last month, the same pace as in July. The reading matched economists’ forecast but was below the BoE’s projections of 2.4% YoY. Meanwhile, the core CPI increased 3.6% YoY, accelerating from 3.3% YoY and turning out to be slightly above economists’ estimate of 3.5% YoY. 

Markets generally interpreted the latest UK CPI prints as an argument for the BoE to stay on track for further policy easing in the coming months after it delivered its first rate cut in  August, citing moderating inflationary pressures. 

Following the data, markets see the BoE maintaining its Bank Rate unchanged at 5.00% tomorrow and then lowering it both in November and December. For 2025, five more rate reductions are expected from the British central bank. 

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