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UK CPI rose less than expected

Tuesday, May 17 2016
The Consumer Prices Index (CPI) rose by 0.3% in the year to April 2016, down from 0.5% in the year to March. Analysts were predicting 0.5% increase. From late 2015, the rate began to increase gradually from close to zero. The drop in April 2016 is the first fall since September 2015. Falls in air fares and prices for clothing, vehicles and social housing rent were the main contributors to the decrease in the rate. These downward pressures were partially offset by rising prices for motor fuels and for certain recreational goods and cultural services, and by food prices, which were unchanged between March and April 2016, having fallen between the same two months 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 April 2016.  Factory gate prices (output prices) for goods produced by UK manufacturers fell 0.7% in the year to April 2016, compared with a fall of 0.9% in the year to March 2016. Core factory gate prices, which exclude the more volatile food, beverage, tobacco and petroleum products, rose 0.5% in the year to April 2016, compared with a rise of 0.3% in the year to March 2016. 
 
Sterling is currently being traded few points above 1.4470 level. Pair is likely to find support around 1.44 handle and resistance above 1.4530 level. Later today, in the US session, CPI, Building Permits, Housing Starts and Industrial Production figures will be released.
More in this category: « RBA worried about low inflation Building Permits at an annual rate of 1.12 million »

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