Quick Take
- The U.K. Consumer Price Index (CPI) for May came in at 8.7%, year-over-year (y-o-y) – matching the previous month – but above the forecasted rate of 8.4%. Core CPI increased to 7.1% y-o-y, coming in above expectations of 6.8% – suggesting a continuing acceleration of inflation.
- Moreover, the UK’s net debt has reportedly surpassed 100% of its Gross Domestic Product (GDP) for the first time since 1961, as noted by PIQ.
- Despite pricing in a 6% interest rate and the potential for a 50 basis point rate rise tomorrow, the pound remained weak against the dollar, further indicating economic pressure.
- Yields across the curve continued to explode, with the front end jumping as much as 7%.
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