Hotter UK inflation chills BoE June rate cut prospects – base case cut August

The UK inflation data is here:

ING says that while the inflation data is “not a BoE gamechanger”, the prospect of a June rate cut is reduced.

  • the Bank of England will look at the numbers and see more noise than signal
  • But we think it does reduce the chances of a rate cut at June’s meeting, even though we’ll get another set of data before that decision. We certainly wouldn’t rule it out though.
  • The Bank is visibly divided and with very few media appearances by the internal committee members, it’s frankly impossible to know how the deciding votes are likely to be cast.
  • However, today’s data supports our long-held base case that the first rate cut will come in August, which offers the BoE an extra inflation print to be more confident about the underlying trend. For now, we’re sticking with that.


This article was written by Eamonn Sheridan at Source