August Inflation Report Looms Large Ahead of BoE Decision

The UK's Office for National Statistics will release the highly anticipated Consumer Price Index (CPI) data for August on Wednesday at 06:00 GMT, which may trigger volatility in the British Pound.

The report could influence the Bank of England's monetary policy decision on Thursday. Economists widely expect the BoE to keep its policy rate unchanged at 3.75%, but another acceleration in price pressure could strengthen expectations of an interest rate hike in the coming months.

According to forecasts, the UK CPI is expected to rise 3.1% YoY in August, up from 2.9% in July, moving further away from the BoE's 2% target. Core inflation, which excludes volatile energy and food components, is also expected to accelerate to 2.7% YoY.

Recent data has shown that transport prices rose 9.1% YoY in July and pump prices increased again in August, with a litre of unleaded petrol reaching its highest level since November 2022.