UK Inflation Risks Tilt Higher, TD Securities Says

TD Securities’ Julie Ioffe sees UK inflation risks tilted to the upside heading into the July CPI release. The firm expects headline CPI to climb to 2.9% year-on-year, mainly because of the Ofgem energy price cap adjustment.

Within the details, services inflation is forecast to ease to 3.4%, while core goods inflation is expected to rise to 1.0%. That leaves the core CPI picture more mixed even as headline inflation moves higher.

The update highlights how energy-related price adjustments can push the UK inflation rate up even if underlying services price pressure cools slightly.