UK: Headline CPI likely to drop to 2.5% y/y in March - TDS

Analysts at TDS are looking for UK headline CPI to drop from 2.7% to 2.5% y/y in March, below consensus of 2.7% and the BoE's forecast from the Feb IR of 2.8%.

Key Quotes

“Despite yesterday's healthy labour market data, a softer-than-expected inflation print might leave markets more unsure about whether the BoE will follow through with a rate hike at their May meeting. However, most of the downside compared to the BoE's projections is coming from lower oil prices since the Feb Inflation Report, so we're looking for core CPI to decline only slightly from 2.5% to 2.4% y/y (mkt 2.5%), showing that underlying inflation trends are still quite firm. Also today, the BoE's FPC members Brazier, Kohn, and Taylor testify to the Treasury Committee at reappointment hearings beginning at 2:15pm BST.”