UK Core CPI Inflation Rate (YoY)
Published:
A yearly measure of UK consumer-price inflation excluding energy, food, alcohol and tobacco.
Full explanation
UK Core CPI Inflation Rate (YoY) shows how much consumer prices have changed over the past 12 months after excluding energy, food, alcohol and tobacco. It is designed to give a steadier view of inflation pressures than the headline Consumer Prices Index because the excluded categories can move sharply. The Office for National Statistics calculates it from the UK CPI basket and publishes it as part of its monthly consumer-price inflation release.
Why traders watch it
It is a widely watched measure of underlying UK inflation that can affect expectations for Bank of England policy, UK government-bond yields and sterling.
Market interpretation
- GBP
- Can prompt reassessment of expected Bank of England policy and interest-rate differentials.
- UK government bonds
- Can influence expectations for future policy rates and gilt yields.
Stronger vs weaker outcomes
A higher-than-expected reading may be interpreted as evidence that underlying price pressures are proving firmer, potentially increasing attention on less-accommodative Bank of England policy expectations. A lower-than-expected reading may be viewed as a sign of softer underlying inflation pressure and may have the opposite effect on those expectations.
A higher-than-expected result may suggest firmer underlying inflation pressure and may increase market attention on less-accommodative Bank of England policy expectations.
A lower-than-expected result may suggest softer underlying inflation pressure and may reduce that attention.
Higher-than-expected core CPI may point to firmer underlying price pressures; lower-than-expected results may point to softer pressures.
Typical volatility
High. Core CPI excludes several important household spending categories and is only one measure of inflation. The annual rate can also be affected by price changes a year earlier, changes to basket weights and revisions or methodological updates.
Trading considerations
- Compare the result with market expectations as well as the prior reading.
- Read core CPI alongside headline CPI, services inflation and the monthly change in prices.
- Check whether base effects, basket changes or other technical factors affected the annual rate.
- Liquidity and spreads can change around the scheduled UK inflation release.
Educational guidance only — never a trading signal or recommendation.
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