| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | United Kingdom | HICP, Y/Y | July | 2.0% | 2.3% | 2.2% |
| 06:00 | United Kingdom | HICP ex EFAT, Y/Y | July | 3.5% | 3.4% | 3.3% |
| 06:00 | United Kingdom | HICP, m/m | July | 0.1% | 0.1% | -0.2% |
| 06:45 | France | CPI, m/m | July | 0.1% | 0.1% | 0.2% |
| 09:00 | Eurozone | GDP (QoQ) | Quarter II | 0.3% | 0.3% | 0.3% |
| 09:00 | Eurozone | GDP (YoY) | Quarter II | 0.5% | 0.6% | 0.6% |
| 09:00 | Eurozone | Industrial production, (MoM) | June | -0.9% | 0.5% | -0.1% |
GBP declined against most of its major rivals in the European session on Wednesday as weaker-than-anticipated UK’s July consumer price index (CPI) figures reinforced bets on two additional interest rate decreases by the Bank of England this year.
The Office for National Statistics (ONS) reported that consumer price inflation in Britain was at 2.2% YoY in July, accelerating from 2.0% YoY in June. This marked the first rebound in the annual inflation rate since December 2023 but was below economists’ forecast of 2.3% YoY. Meanwhile, the core inflation eased to 3.3% YoY in July, the lowest rate since September 2021. Economists had expected the core inflation rate to slip to 3.4% YoY in July from 3.5% YoY in the previous month.
The latest data prompted a recalibration of the BoE’s rate expectations by markets. According to Bloomberg, markets are now seeing the British central bank to cut its benchmark rate by another 50 basis points by the end of 2024 compared to 44 basis points a day ago. In addition, the probability of a September rate reduction increased to about 40% from 30% on Tuesday.
Investors’ focus now shifts towards the preliminary UK GDP growth estimate for the second quarter and retail sales data for July, scheduled to be released on Thursday and Friday respectively, which could provide more hints on the future path of the BoE’s interest rates.