UK inflation figures on Wednesday came in slightly higher than expected, say Commerzbank FX analysts Ulrich Leuchtmann and Michael Pfister.
BoE to make first rate cut soon
“UK inflation figures on Wednesday came in slightly higher than expected. The headline rate came in at 2.0% year-on-year (1.9% expected), while the core rate was 3.5% (3.4% expected). However, the figures were very close, with the headline rate at 1.97% and the economists’ average at 1.94%.”
“A real surprise looks different. I suspect the news was not so much that rates were slightly higher than expected. Rather, it was that this went against the global trend. While inflation numbers in the US, Canada, Sweden, etc. have recently surprised on the downside, inflation in the UK has been (somewhat) more stubborn.”
“The next Bank of England (BoE) decision should be very exciting. We still tend to think that the BoE will make its first rate cut soon. But whether it is in August or September, the key point will be that, with core and services inflation remaining high, large rate cuts are unlikely to be an issue. Sterling should therefore remain well supported over the medium term.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
