Yesterday's session was marked by UK CPI and PPI figures. The Consumer Prices Index including owner occupiers’ housing costs (CPIH, not a National Statistic) 12-month inflation rate was 2.6% in June 2017, down from 2.7% in May 2017. This is the first fall in the CPIH inflation rate since April 2016, although it remains higher than in recent years. Falling prices for motor fuels and certain recreational and cultural goods and services were the main contributors to the fall in the rate. These downward contributions were partially offset by rising prices for furniture and furnishings. The Consumer Prices Index (CPI) 12-month rate was 2.6% in June 2017, down from 2.9% in May 2017. The annual rate of inflation for goods leaving the factory gate slowed for the second time this year in June and follows a steep decline in input price inflation since January 2017.
Factory gate prices (output prices) rose 3.3% on the year to June 2017 from 3.6% in May 2017, which is the slowest rate prices have increased since December 2016. Input prices rose 9.9% on the year to June 2017 from 12.1% in May 2017, meaning the annual rate has fallen 10 percentage points since January 2017. Inputs of crude oil is the main driver of the recent slowing of input price inflation as annual price growth for crude oil fell from 88.9% in February 2017 to 9.1% in June 2017.
There will be no major data releases from the UK tomorrow. In the US session Building Permits and Housing Starts figures will be published. Analysts predict incline to 1.20 million in Building Permits and to 1.16 million in Housing Starts.
Figures to watch:
Building Permits/Housing Starts (Wednesday 14:30)
