The services and core components of inflation continue to flatline, as they have done for much of the past year, and this lack of progress is likely to embolden the hawks in calling for an end to policy easing as rates inch closer to neutral in the coming months.
Market pricing for cuts is unchanged, with three or four more priced in before the end of the year.
A 0.1% miss on estimates feels somewhat irrelevant while there is a trade war erupting in North America and the markets are bracing for Trump’s actions towards the EU, of course, and investors have taken the upside surprise in their stride.
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