Latest data released by ONS - 18 September 2019

  • Prior 0.0%
  • CPI +1.7% vs +1.9% y/y expected
  • Prior +2.1%
  • Core CPI +1.5% vs +1.8% y/y expected
  • Prior +1.9%

Those are some poor headline inflation readings with the core reading even sinking to its weakest level since November 2016. ONS notes that the decline in inflation pressures stem from a drop in computer game prices and clothing prices, relative to last year.

Inflation was one of the few bright spots in keeping a more steady BOE outlook but as price pressures start to dwindle, you can expect the BOE to cut rates sooner rather than later to combat the drop here if it persists.

The drop in annual house prices below isn't encouraging as well, with the +0.7% reading the weakest since September 2012 and ONS notes that 4 out of 9 regions in the country are now seeing annual declines in house price growth.

The pound has fallen further on the day with cable down to 1.2450 currently, from around 1.2465 going into the decision.

Some other details on the day as producer price and retail price figures are released:

  • PPI output -0.1% vs +0.2% m/m expected
  • PPI output +1.6% vs +2.0% y/y expected
  • PPI input -0.1% vs -0.2% m/m expected
  • PPI input -0.8% vs -0.1% y/y expected
  • RPI +0.8% vs +0.7% m/m expected
  • RPI +2.6% vs +2.6% y/y expected
  • July HPI +0.7% vs +0.6% y/y expected
  • Prior +0.9%; revised to +1.4%