UK May CPI +3.4% vs +3.4% y/y expected

• Prior +3.5%
• Core CPI +3.5% vs +3.5% y/y expected
• Prior +3.8%

The readings match with estimates and mark a minor drop from April, as outlined by the reasons here earlier. Overall, inflation remains an issue and that won’t see the BOE move any quicker to cut rates again next. The odds for a rate cut tomorrow were ~12% but it is very much a given that the central bank won’t be slashing the bank rate through the summer at least.

GBP/USD is up a touch from 1.3445 to 1.3458 but it also coincides with some mild weakness in the dollar across the board.

This article was written by Justin Low at www.forexlive.com.