The Consumer Prices Index (CPI) rose by 0.6% in the year to August 2016, unchanged from July. The rate is still relatively low in the historic context although it is above the rates experienced in 2015 and early 2016. The main upward contributors to change in the rate were rising food prices and air fares, and a smaller fall in the price of motor fuels than a year ago. These upward pressures were offset by falls in hotel accommodation prices, in addition to smaller rises in the prices of alcohol, and clothing and footwear than a year ago.
The price of goods bought and sold by UK manufacturers, as estimated by the Producer Price Index, rose in the year to August 2016. This is the second increase in a row following 2 years of falls. Factory gate prices (output prices) for goods produced by UK manufacturers rose 0.8% in the year to August 2016, compared with a rise of 0.3% in the year to July 2016. The index has been following an upward trend since August 2015. The increase of 0.8% in the year to August 2016 is a continuation of the trend over the past year.
Sterling is currently being traded around 1.3280 level. Pair is likely to find support around 1.3240 area and resistance above 1.3340 handle.
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