Heteronomics - FLASH: surprise UK inflation surge in Aug-18

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Heteronomics

Philip Rush

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FLASH: surprise UK inflation surge in Aug-18

- CPI inflation exceeded all expectations by surging to 2.7% in August instead of slowing. Prices within transport (seafares) and recreation (theatre, AV, games) were responsible for the upside surprise.
- Two-thirds of the CPI shock persists in my forecast. This outcome would be another small upside surprise to the BoE, but it gains relevance amid the concentration within the domestic components and alongside upside news in wages and GDP.
- A smooth Brexit remains crucial to my relatively hawkish Feb-19 BoE rate hike call.

19/09/2018 3 EN

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Heteronomics

Heteronomics provides UK-centric macro research. A hallmark attention to detail delivers a depth of analysis beyond what the sell side now delivers. Clients can also experience events that privately provide insights on these topics. Have a bespoke request for research or an event? Let us know. Clients can expect assistance with their own requirements to the extent it doesn't impinge upon other clients. Think of it as retaining an expert economist, without the large overhead.

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Analysts

Philip Rush

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FLASH: surprise UK inflation surge in Aug-18

Riksbank: hopeful for vaccine dividend

BoE: preparing policy like a Scout

Italy: Dragging in Draghi

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