European inflation data - Ester Holdings

European inflation data

In Great Britain:

  • Consumer Price Index (CPI) (m/m) (Aug), fact 0.4%, forecast 0.5%.
  • Consumer Price Index (CPI) (y/y) (Aug), fact 1.7%, forecast 1.8%.
  • Procurement producer price index (m/m) (Aug), fact -0.1%, forecast -0.4%.

In the eurozone:

  • Core Consumer Price Index (CPI) (y/y) (Aug), 0.9% fact, 0.9% forecast.
  • Consumer Price Index (CPI) (y/y) (Aug), fact 1.0%, forecast 1.0%.
  • Consumer Price Index (CPI) (m/m) (Aug), fact 0.1%, forecast 0.2%.

Consumer inflation in Europe slowed in August. A particular decrease in inflation can be seen in the UK, where inflation fell to the level of early 2017, provoking an increase in concerns about this indicator of the UK economy. So, pressure on the British pound has intensified, which remains under the pressure from the restoration of the American dollar as well.

Fig. 1. UK Consumer Price Index (CPI) chart (y/y)

Eurozone inflation rates are more in line with expectations and meet the last months, while maintaining a downward trend.

As a result of the publication of inflation data in Europe, fears of a slowdown in consumer inflation persisted. The British pound accelerated the decline on weak data, but its decline is more evident against the US dollar. The decline, in turn, will be limited by upcoming US data.

The EUR/GBP pair slowed down the decline on technical correction, and weak UK data confirmed the formation of a flat from 0.8880-0.8900 to 0.8830-20. The overall downtrend for this pair remains, despite the oversold.

Fig. 2. EUR/GBP chart. Current price – 0.8860

Read also: “US and China return  to the negotiating table”

Hanzenko Anton


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