UK June CPI rose 2.6% YoY, missing estimates, easing pressure on the Bank of England to raise rates further.
The British Pound recovered against the Japanese Yen after UK inflation data undershot expectations. Headline CPI grew 2.6% year-over-year in June, below the 2.7% forecast and May’s 2.8% reading. Monthly inflation matched expectations at 0.1%, down from 0.2% previously.
Core CPI held steady at 2.6% YoY, defying expectations of a slowdown to 2.5%. Services inflation eased to 3.6% from 3.7% in May, a key metric for the Bank of England. The softer data reduces near-term odds of further rate hikes.
Investors now await UK retail sales and July PMI data on Friday, while concerns persist over potential Japanese forex intervention amid the Yen’s decline.