UK Inflation Swoops Toward the BoE’s 2 % Target
Economists are buzzing that rates of price rise could finally dip below the Bank of England’s sweet spot of 2 % – and for the first time in over three years. The office that counts the pennies, the Office for National Statistics (ONS), will drop the latest numbers on Wednesday, letting us know exactly how fast costs have been easing over the past month.
What the Experts are Saying
- Consensus hit: Pantheon Macroeconomics surveyed the market and guesses June’s Consumer Prices Index (CPI) could be around 1.9 %. That’s a comfy tight spot for the BoE.
- Governor’s cue: Andrew Bailey has warned that if inflation crosses below the 2 % line, the next big bet could be cutting rates.
- Policy pause: The Monetary Policy Committee just shrugged – Bank Rate stayed put for the seventh straight meeting, no surprises, says Michael Brown of Pepperstone.
Beyond the Numbers – Real‑World Feelings
Sandra Horsfield from Investec reminds us that the battle lines are still open:
“After nearly three years above target, May’s CPI finally dipped back to 2 %. That’s great headline fodder! But we can’t get carried away – the cost‑of‑living war is far from over for many people.”
The new Labour government still has to factor in those lingering pressure points, even if CPI stays juggling around the target.
Meanwhile, James Smith at ING keeps the eye on the engine behind the numbers:
“Policymakers still sweat most over services inflation. That final data release will decide whether the Bank can dare to cut rates in August.”
Keep Your Wallets Happy
While the headline looks promising, remember the truth: inflation’s still doing a little dance. It’s important to stay relaxed, but keep an eye on how those price swings trickle into everyday life.
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