UK CPI data were very close to expectations in June

UK June CPI data were very close to expectations (0.0% y/y), but the more important UK inflation news this week is the forward-looking average earnings data out late this afternoon. In April data, strong wages pushed average earnings to 2.7% 3m/y (both incl. and excl. bonuses), and for May, economists expect an even firmer print of 2.9% 3m/y excl. bonuses (cons: 3.0%). 

The upshot of this is that another month of strong wage growth could be enough to see at least two MPC members vote for a hike in August. 

"We still have a constructive short-term view on GBP (including our Trade of the Week this week: long GBP/CAD)," says RBC Capital Markets.