U.K. inflation likely to have stayed unchanged in August, BoE likely to stay on hold in quarters ahead

U.K. headline inflation data for the month of August is likely to have remained almost unchanged in August. Inflation has been on a downward trend after outpacing 3 percent in the wage of the Brexit Referendum in 2016, as a sharp fall in sterling led price pressures to increase sharply.

Last month, headline inflation came in at 2.5 percent year-on-year, while core CPI stayed below 2 percent. Retail sales data is also set to be released and might provide further detail on the outlook for the consumer sector.

Retail sales growth has rebounded in recent months as price pressures have eased, after sales decelerated through the end of 2017. While inflation has begun to normalize and retail sales have strengthened, U.K. economic growth has stayed sluggish, with real GDP rising 1.5 percent annualized in the second quarter.

“Given slower economic growth and ongoing Brexit negotiations, we look for the Bank of England (BoE) to remain on hold in coming quarters until these concerns subside”, stated Wells Fargo.

At 19:00 GMT the FxWirePro's Hourly Strength Index of British Pound was slightly bullish at 63.4771, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -77.9965. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex