This is an important week for UK data and with the forward curve priced for close to zero risk of a rate hikebefore year-end, upside surprises would solicit a bigger market reaction than downside surprises. April CPI is out today. It will provide the first opportunity to crosscheck the Bank of England’s recently revised forecasts, which now project a more subdued profile over the near term. “We see upside risk to the Bank’s -0.1% y/y estimate for April CPI that was embedded in the latest Inflation Report; in particular, fuel price dynamics in our view signal a higher outturn (RBC: 0.1%y/y, cons 0.0%)”, says RBC Capital Markets.
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