Chart of the Month: June 2023


UK headline CPI fell below 10% for the first time since September 2022. Some might have expected the drop in headline inflation to give the market and the BOE some solace but core inflation (ex food and energy) reaccelerated to a 31 year high. Core inflation is proving “sticky” which is a concern for the BOE. The market concluded that this reacceleration will force the BOE to continue hiking rates, resulting in the peak policy rate repricing significantly higher.