Monitor the UK BOE Inflation Letter to gauge shifts in monetary policy when CPI deviates from the 2% target.
This indicator provides insight into future monetary policy. If the year-on-year Consumer Price Index (CPI) deviates by more than 1% from the target rate of 2%, the Governor of the Bank of England is obligated to submit a letter to the Chancellor of the Exchequer detailing the actions being taken in response. This letter is issued only when the recent CPI y/y exceeds 3.0% or falls below 1.0%, and it is limited to one release every three months.
What it Measures
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Usual Effect
A more hawkish stance than anticipated tends to strengthen the currency.
Source & Frequency
Bank of England (latest release) - https://www.bankofengland.co.uk/
How Data is Derived
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Also Known As
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Acronym
Bank of England (BOE), Consumer Price Index (CPI)