UK Inflation Jumped in July, Leaving Deflation Fears Behind

Slight delay in the release by the source. Those are solid beat on inflation figures and from the headline it will help to alleviate some pressure off the BOE and buy them more time with the current wait-and-see approach. ONS notes that rising prices in clothing, petrol, households goods were among the contributors but the largest rise came from recreation and culture (+0.3% in HICP terms).

This will at least keep the pound more steady, or at least not become a reason for markets to become more anxious about the BOE factoring in negative rates in the near future. No doubt headline inflation is still subdued, but at least it has been trending a little higher in the past two months so policymakers can allude to that to wait for more data. GBP/USD continues to keep higher at 1.3260 currently, with the dollar staying weaker across the board as we look to get the session underway.