As the CPI falls to 2.8% HSBC brings forward to July their forecast for more money printing by the Bank of England
The CPI fell to 2.8% this month – making it 30 straight months since the BoE has hit their government mandated target of 2%. From the report:
- CPI annual inflation stands at 2.8 per cent in May 2012
- RPI annual inflation stands at 3.1 per cent in May 2012
Headlines for the May 2012 Consumer Price Indices
- CPI annual inflation stands at 2.8 per cent in May 2012, down from 3.0 per cent in April. The annual rate is the lowest since November 2009 when it was 1.9 per cent. The CPI stands at 122.8 in May 2012 based on 2005 = 100
- The largest downward pressures to the change in CPI annual inflation between April and May came from motor fuels and food & non-alcoholic beverages
- The largest upward pressures to the change in CPI annual inflation between April and May came from air and sea transport, where the timing of Easter had a significant impact on the April to May movement (see background note 1)
- RPI annual inflation stands at 3.1 per cent in May, down from 3.5 per cent in April. The annual rate is the lowest since December 2009. The largest downward pressures to the change in RPI annual inflation between April and May came from petrol & oil and food. Partially offsetting these was an upward pressure from other travel costs which includes air transport. The RPI stands at 242.4 in May 2012 based on January 1987 = 100
30 months of straight fail looks like this:
But more interestingly it now means that just about every bank analyst out there have bought forward their guidance for when they think the BoE will do more money printing. The latest of which is HSBC who now see money printing coming in July.
So enjoy these lower (but still above target) CPI rates while they last – after the BoE get’s through with their ‘pre-active’ summer of printing they’re not going to stay here for long.
Oh, and don’t forget that because the BoE have produced nearly twice as much inflation as they are charged to do, it means that for the CPI just to get back to where it should’ve been all along it would require an annualised fall in the CPI of more than 50%.
- UK CPI falls to 3% – too low for the Bank of England, money printing to start within 3 months? The IMF certainly thinks so
- UK CPI falls to 4.2%: inflation in the UK is still more than 100% over target, more money printing now guaranteed
- UK consumer confidence falls to 44 – Bank of England to respond by printing?
- BNP Paribas and JP Morgan both see the Bank of England printing more money in the next 3 months
- Producer prices in the UK fall giving the Bank of England more scope to print
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