September inflation data due from the UK on Wednesday #d16 October 2019
- at 0830GNT
Societe Generale, in brief:
- Higher core inflation to drive up headline
- labour market pressures are clearly manifesting themselves in steadily rising earnings growth, points to a bounce in services inflation … especially as productivity growth is currently non-existent
- The path of the other component of core inflation, non-energy industrial goods, has been driven by the exchange rate. … the downward pressure from this source has now run its course and, in the coming months, goods inflation should steadily rise, starting with the September data
- result should be that core inflation rises
- However, each of the non-core components ... is likely to contribute a downward effect on inflation. The net effect should be an increase in headline inflation from 1.7% to 1.9%.
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If so this should be a positive input for GBP, although most focus will be on Brexit developments of course.
