TD Securities forecasts UK inflation to ease to 2.7% in June, below BoE projections, due to lower fuel costs but persistent services pressures.
UK headline Consumer Price Index is expected to slow to 2.7% year-on-year in June, matching consensus but undershooting Bank of England forecasts of 3.1%. The decline is attributed to lower fuel prices, though services inflation remains elevated at 3.6%, reflecting persistent pressures from airfares and wage effects.
Core CPI is projected to hold at 2.6%, unchanged from prior levels, as core goods show limited movement. Energy inflation, including electricity and gas, is likely to rise to 5.9% year-on-year due to upcoming price cap adjustments, posing risks for future inflation trends.
The Bank of England may view the softer headline print as supportive of a prolonged policy hold, though sticky services inflation and second-round wage effects could complicate the outlook. Markets will assess the balance between easing fuel costs and persistent underlying pressures.