The data is released by the ONS - the UK's national statistical service. CPI y/y is the comparison of prices in the consumer basket with the same month a year ago. The event status is high importance, meaning the reaction in the pound usually comes in the very first minute after the release.
Trajectory of recent months: 2.9% in July, 3.1% in August, forecast 3.4% for September. A jump of 0.3 percentage points upward at once. The Bank of England's official target is 2%, meaning the expected figure is holding almost one and a half times above the regulator's benchmark.
Why this matters right now: the higher inflation is relative to target, the weaker the arguments for easing monetary policy. That is why the market reads this report not as a story about prices in shops, but as a hint about the future rate.
In focus: GBP/USD, EUR/GBP, GBP/JPY, the FTSE 100 index and UK government bonds. The pound reacts first, the index and the debt market follow.
Scenario A: the actual figure matches the forecast of 3.4% - the move is short, volatility fades within half an hour.
Scenario B: a deviation from consensus of even 0.1-0.2 points - a sharp impulse in the pound, widened spreads and increased slippage risk on the first candles.
Do you trade such data releases?
Nine in the morning, the pair is frozen, and everything is decided in the first seconds after the number. Many can trade this, but almost no one reads the rules of prop programs before a challenge. At some firms, trading at the moment statistics are published is standard practice, while at others, hitting the report window automatically zeroes the account. The difference shows up on exactly a day like today. A couple of minutes to check the terms is cheaper than one disabled account.