| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | United Kingdom | HICP, Y/Y | May | 3.5% | 3.4% | 3.4% |
| 06:00 | United Kingdom | HICP ex EFAT, Y/Y | May | 3.8% | 3.6% | 3.5% |
| 06:00 | United Kingdom | HICP, m/m | May | 1.2% | 0.2% | 0.2% |
| 08:00 | Eurozone | Current account, adjusted, bln | April | 50.9 | 40.4 | 19.8 |
| 09:00 | Eurozone | Harmonized CPI ex EFAT, Y/Y | May | 2.7% | 2.3% | 2.3% |
| 09:00 | Eurozone | Harmonized CPI | May | 0.6% | 0% | 0% |
| 09:00 | Eurozone | Harmonized CPI, Y/Y | May | 2.2% | 1.9% | 1.9% |
GBP strengthened against other major currencies in the European session on Wednesday as investors continued to monitor the evolving Israel-Iran conflict and digested the UK’s consumer price index (CPI) report for May, awaiting the upcoming Bank of England’s decision on interest rates.
U.S. President Donald Trump held a national security council meeting to discuss the escalating conflict between Israel and Iran on Tuesday. The U.S. leader earlier said on Truth Social that “everyone should evacuate Tehran immediately”, that Iran's Supreme Leader “is an easy target”, that his “patience with Iran is wearing thin,” and that he wants a “real end” to Iran's nuclear program.
These events fueled speculations about a potential U.S. involvement in the Israel-Iran conflict.
The Office for National Statistics (ONS) reported that the UK’s headline inflation eased to 3.4% YoY in May from 3.5% YoY in the previous month, matching economists’ expectations. Meanwhile, the core inflation slowed to 3.5% YoY from 3.8% YoY in April. This was slightly below economists’ prediction of 3.6% YoY.
Services inflation - closely watched by the BoE - moderated to 4.7% YoY from 5.4% YoY in April. Economists had forecast 4.8% YoY.
Today’s data, overall showing a sticky inflation in Britain, had little impact on markets’ expectations for the BoE’s further policy easing this year. They continue to see no cut at the British central bank’s meeting on Thursday and to price in two additional reductions by the end of 2025, though the odds of a potential first move in August slightly decreased.
Markets will scrutinise tomorrow’s statements of the BoE, as well as the comments of its governor Andrew Bailey, for any signals on future rate decisions.