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Hoy 19:20
UK inflation rises Lower than economists and Bank of Englandwhich has led operators to increase their bets on speed cuts interest rate In the next few months.
Consumer prices rose 2.2% in July That was below the 2.3% economists had expected, according to data from the National Bureau of Statistics released on Wednesday. Services inflation – closely watched by monetary policymakers for signs of continued pressure on domestic prices – posted its lowest reading in more than two years.
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Yael Selfhin, KPMG’s chief UK economist, said that while it was the first rise in headline consumer prices this year, the data represented a “dovish turn” in the overall trend. He said it “should go some way to reassuring MPC members, given that the bank’s forecasts earlier this month suggested a sharper rebound”.
Forecast and Outlook
The Bank of England had previously predicted that economic growth in July would be 2.4% Interest rates are set to rise to 2.8% later this year, with Governor Andrew Bailey warning against reducing borrowing costs “too quickly”. Operators do not expect changes before November. The Bank of England cut rates for the first time since the pandemic on August 1 and will meet again on September 19.
However, The sharp drop in service industry inflation has given operators confidence What’s more, the cuts take place in November and December. They still see less than a 50 percent chance of a rate cut next month. Sterling fell 0.3 percent to $1.2820, but remains the best performing currency among the Group of 10 major economies this year on bets the Bank of England will keep rates relatively high.
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