Recent, more dovish statements by the Bank of England have dampened rate-hike expectations in the UK. Sterling suffered, of course.
Today, the ONS will release several inflation series for July. None of them is likely to signal that rate hikes are necessary. Year-on-year producer price inflation looks set to be clearly negative.
According to Commerzbank, "Consumer prices are likely to have risen a bit more strongly, but not much. Headline inflation looks set to have remained at 0.0%. Only the core rate might provide a ray of hope; it might climb to 0.9% and thus be not too far away from the BoE's target of 2%. The BoE has recently focused on wage inflation, which should lead to price pressure if the economy is doing well."
