UK: puny pass-through of VAT and EOHO
- UK inflation data delivered another upside surprise in Aug-20 as restaurant prices were resilient again. Puny pass-through of EOHO and VAT should unwind in Sep-20 and Feb-21 respectively with the expiration of those schemes.- A failure of airfares to seasonally increase for the summer holidays offset the other upside news for the RPI. Airfares no longer have the normal room to decline in September. The risk of flat yearend seasonal factors increases on this behaviour.
- Inflation and many “core” measures will remain highly volatile during these shocks, but the median is smoothly trending higher. Underlying levels are still consistent with below-target inflation over policy-relevant horizons, thereby easing more QE.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.