UK Consumer Prices Index (CPI) rose by 0.5% in the year to March 2016, compared with a 0.3% rise in the year to February. Analysts were predicting smaller increase by 0.3%. The rate has increased gradually since October 2015 although is still relatively low in the historical context. Rises in air fares and clothing prices were the main contributors to the increase in the rate between February and March 2016. These upward pressures were partially offset by a fall in food prices and a smaller rise in petrol prices than a year ago.
The price of goods bought and sold by UK manufacturers, as estimated by the producer price index, continued to fall in the year to March 2016. Factory gate prices (output prices) for goods produced by UK manufacturers fell 0.9% in the year to March 2016, compared with a fall of 1.1% in the year to February 2016. Core factory gate prices, which exclude the more volatile food, beverage, tobacco and petroleum products, rose 0.2% in the year to March 2016, compared with a rise of 0.1% in the year to February 2016. The overall price of materials and fuels bought by UK manufacturers for processing (total input prices) fell 6.5% in the year to March 2016, compared with a fall of 8.2% in the year to February 2016.
Sterling is currently being traded few points above 1.43 level. Pair is likely to find support around 1.4250 handle and resistance above 1.4350 level. There will be no major data releases later today.
