• United Kingdom’s CPI is foreseen to tick higher in July to 2.3% YoY.
• The Bank of England acknowledged the battle against inflation is not done.
• The Pound Sterling advances against the US Dollar ahead of key data. 

The United Kingdom (UK) will release the Consumer Price Index (CPI) for July on Wednesday, a high-impact macroeconomic event. The data, published by the Office for National Statistics (ONS), directly influences the Bank of England (BoE) monetary policy decision and, hence, the Sterling Pound (GBP).

When policymakers met at the end of July, the BoE trimmed the Bank Rate by 25 basis points (bps) to 5%, as inflation, as measured by the CPI, stood at 2% in May and June, meeting the central bank’s goal.

The UK CPI is expected to have risen at an annual pace of 2.3% in July, above the preferred 2%. Core annual inflation, however, is foreseen at 3.4%, below the 3.5% posted in June.

Nevertheless, the figures are in line with what the central bank anticipated in its latest meeting. The Monetary Policy Committee (MPC) stated that “CPI inflation is expected to increase to around 2¾% in the second half of this year, as declines in energy prices last year fall out of the annual comparison, revealing more clearly the prevailing persistence of domestic inflationary pressures. Private sector regular average weekly earnings growth has fallen to 5.6% in the three months to May, and services consumer price inflation has declined to 5.7% in June.”