There's plenty to be happy about following May's inflation figures - but there's one number that is concerning economists. Experts at Capital Economics say the fall from 2.3% in April to 2% in May 'probably' won't be enough to persuade the Bank of England to cut interest rates from 5.25% tomorrow.We expected this, with many predicting that figure to be cut by the Bank in August, but the economists are now worried about that date too.
'The bad news is services inflation has proved remarkably persistent, slowing only to 5.7% in May from 6.1% in February, a period when large base effects should have weighed heavily on the year-over-year inflation rate.'With that in mind, Pantheon described the notion that the Bank would cut interest rates in August as 'a longshot'. 'Services inflation overshooting the MPC’s forecast by 40bp makes an August MPC rate cut look like a longshot.
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Source: i newspaper - 🏆 8. / 89 Read more »