Outlook for British pound on Tuesday the 17th of June: It's all about inflation data

At the close of the London equity trading session on Monday we see:

The pound euro exchange rate is 0.08 pct higher at 1.1778.
The pound US dollar exchange rate is 0.04 pct lower at 1.5702.
The pound Australian dollar exchange rate is 0.26 pct higher at 1.6461.

Note that these are forex rates to which your bank will add a discretionary spread, however an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please find out more here.

The inflation releases

At 09:30 the ONS release the following:

Core Consumer Price Index (YoY) (May) Expected Reading: 2.1% (THIS is the headline event!)
Consumer Price Index (MoM) (May) Expected Reading: 0.1%
Consumer Price Index (YoY) (May) Expected Reading: 2.6%
DCLG House Price Index (YoY) (Apr) Expected Reading: 2.6%


PPI Core Output (YoY) n.s.a (May) Expected Reading: 0.9%
PPI Core Output (MoM) n.s.a (May)  Expected Reading: 0.1%
Producer Price Index - Input (MoM) n.s.a (May)  Expected Reading: 0.0%
Producer Price Index - Input (YoY) n.s.a (May) Expected Reading:    2.5%
Producer Price Index - Output (MoM) n.s.a (May) Expected Reading: 0.0%
Producer Price Index - Output (YoY) n.s.a (May) Expected Reading: 1.5%
Retail Price Index (YoY) (May) Exected Reading:    3.1%
Retail Price Index (MoM) (May) Exected Reading:    0.2%

John Wraith at Bank of America Merrill Lynch gives his views ahead of the inflation data:

"Consumer price inflation data kicks off a busy week for UK economic indicators on Tuesday 18th, with CPI expected to have reaccelerated to +2.6% y/y in May from +2.4% in April as the dampening impact of the timing of Easter unwinds, and petrol price effects also exert upward pressure.

"The latter is expected to continue in June, and in conjunction with the pass through from the sharp weakening of sterling at the start of the year, we anticipate a further rise in CPI in June, to +3.0%.

Chris Walker at Barclays:

"The scope for further asset purchases remains fairly low, though, unless we get a material weakening in growth prospects again, while inflation expectations have started to fall, CPI (Tues) is expected to tick up again to 2.6% y/y. Barclays expect a print of 2.7%.  GBP has rallied in line with the steepening of the front-end of the UK rates curve, and in the near term we expect the rebound in data to continue to support the currency. Over the medium-term horizon, we expect broad USD strength to push GBP/USD lower once again, however."