Daily Brief Macro: UK: Flying Inflation Is Landing Slowly and more

• CPI inflation failed to slow from 8.7% in May-23 as airfares surged belatedly. Yet the 14bps of upside news entirely disappears in our June forecast, so it is hardly hawkish.
• The so-called core over-weights airfares strength. Underlying UK pressures slowed closer to its peers by other measures. Slower food inflation should soon help too.
• In our view, winning the G10 ugly contest does not justify the extent of relative repricing. The BoE shouldn’t panic over the 0.2pp of upside we’re tracking to June CPI.

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• Most investors treat EM as a bundle trade on USD strength and liquidity, not appreciating the diversity in EM’s thus taken-in exposure unreflective of their thesis
• China and the US are the two giants who move markets with USD and trade respectively – both of which reflect the global cycle
• See how we are positioned below and access our entire live portfolio book right here

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