UK headline CPI data were in line with expectations

UK headline CPI data were in line with expectations (0.1% y/y after dipping below zero for just one month).

Other measures of inflation (RPI, core CPI, PPI) were slightly weaker, but the headline measure carries most weight in policy decisions and GBP was unmoved. CPI inflation is expected to remain around zero for the next few months.

This afternoon we get the UK labour report and MPC Minutes. 

RBC says they are in line with consensus in looking for a notable improvement in wages ex bonus (2.5%3M/y/y) and a unanimous vote to keep Bank Rate unchanged in the MPC Minutes. 

However, it shouldn't be long before at least two members start voting for a hike again and with the forward curve flat into 2016, the risks are asymmetric to the upside for GBP.