UK Producer Price Inflation eases in June
Producer Price Inflation Output (PPI) m/m came in at -0.4% compared to -0.2%, May’s final reading and consensus for -0.2%. On a yearly basis, PPI dropped to 2.3% from 2.8% on the last reading against expectations for 2.4%.
This indicator is a proxy to gauge Consumer Price Index or simply put inflation.
These figures indicated that inflation slowed to its lowest level since September 2009, due to the recent decline in oil prices. With inflation remaining under control, the Bank of England has injected £50 bln in the market to bring back the economy from recession and counter any negative effects from the on-going euro area debt crisis.
On the contrary, PPI Input m/m rose to -2.2% in June, up from -2.5% previously and economists’ forecast of -2.1%. PPI Input y/y came out at -2.3% lower than the previous reading at 0.10% below expectations for -2.1%.
On a side note, the Office for National Statistics also announced on Friday that the UK Core PPI m/m eased to -0.2% in June, down from 0.0% previously, compared to economists’ survey for an unchanged figure.
After yesterday’s drawdown, the GBP/USD has consolidated higher, and hit a new session-high at 1.5551 after the macro-economic data release.
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