UK economy slipped back into deflation, surprising analysts who expected inflation to remain stable at zero growth. Pound started falling well ahead of the inflation data posing doubts, whether the data got leaked or not.
Pound is currently trading at 1.524 against Dollar, down sharply from its today's high around 1.5388.
- Consumer price index came at -0.1% for both monthly and yearly basis.
- Core consumer price index came at 1% y/y, lower than analysts' expectations of 1.1% growth.
- Retail price index growth dropped to 0.8% y/y compared to 1.1% in August.
- House price index failed to grow as expected at 5.5% y/y, instead grew at 5.2% y/y in September.
- Producer price index down -0.1% in September.
Focus now is on two BOE policymakers scheduled to speak in front of parliamentary committee.
MPC's most recent member Gertjan Vlieghe will appear before parliamentary committee at 10:00 GMT, followed by Ian McCafferty at 11:00 GMT.
Pound's drop is in line with our longer term forecast of 1.44 against USD.


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