UK CPI and Eurozone industrial production in focus – Nomura

Analysts at Nomura are forecasting a 0.1pp fall in UK CPI inflation in May (to 2.3%), with the risks to the upside.

Key Quotes

“Reasons for a fall are: negative base effects related to household energy and recreation prices more than offsetting the upside from transport costs. An unchanged RPI-CPI wedge suggests a fall in RPI inflation to 3.3%.”

“EA Industrial production: We expect euro area industrial production to decrease by 0.3% in April, echoing the message that has emerged from recent manufacturing PMI surveys and some country-specific production data.”

“UK Producer prices: The price indicators in the surveys suggest a further rise in core output prices in May. Headline output prices could rise materially more thanks to rising oil prices. The fall in sterling and rise in oil prices over the month should mean a significant rise in input prices (Nomura forecast: +2.5% m-o-m).”