UK CPI slowed notably to 1.7% yoy in August, down from 2.1% yoy and missed expectation of 1.8% yoy. That’s also the lowest rate since December 2016. Core CPI also dropped to 1.5% yoy, down from 1.8% yoy and missed expectation of 1.9% yoy. RPI dropped to 2.6% yoy, down from 2.8% yoy but beat expectation of 2.4% yoy.

PPI came in at -0.1% mom, -0.8% yoy versus expectation of -0.6% mom, -1.0% yoy. PPI output was at -0.1% mom, 1.6% yoy versus expectation of 0.1% mom, 1.7% yoy. PPI output core was at 0.2% mom, 2.0% yoy versus expectation of 0.1% mom, 1.9% yoy. House price index rose 0.7% yoy in July versus expectation of 0.8% yoy.

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GBP/USD dips notably after the release and struggles to sustain above 38.2% retracement of 1.3381 to 1.1958 at 1.2502. From intraday point of view 1.2392 minor support is first line of defense. Break will be the first indication of rejection by 1.2505 fibonacci level and turn focus to 1.2283 support for confirmation of completion of rebound from 1.1958.

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