United Kingdom: Inflation risks tilt higher - TD Securities | FXStreet

TD Securities’ Julie Ioffe expects UK headline CPI to rise to 2.9% year-on-year in July, largely driven by the Ofgem energy price cap adjustment. The outlook also points to services inflation easing to 3.4%, while core goods inflation is forecast to climb to 1.0%, keeping core CPI steady at 2.6%. The bank flags upside risks that could challenge the recent disinflation trend, including higher food prices, potential re-acceleration in airfare as airlines try to recoup post-summer fuel costs, and strengthening core goods inflation as electronics prices rise and supply-chain pressures limit discounting. It also notes that wage impacts may be muted by a loosening labor market, leaving the Bank Rate likely on prolonged hold.