Next week's UK CPI will be market focus; AI-driven memory-chip shortages and
higher energy costs are keeping the Bank of England cautious. Wednesday's print
is expected to show CPI accelerating for the first time in four months;
economists' median forecast is July CPI 2.9% YoY. Forecasts indicate this may
mark the start of an upward trend into H2, reversing earlier easing. With the
Iran conflict increasingly feeding into prices and domestic activity still firm,
the data could unsettle BoE rate-setters. The Bank of England warns rapid
expansion of AI compute is pushing up memory-chip costs for phones, laptops and
game consoles, and British Retail Consortium July data shows chip-cost increases
are passing through to electronics prices.
