"Inflationary pressures persist, driven by a tight labour market and resultant rising wages, as well as transport and fuel costs, rising airfares, and high costs in the services sector. The UK remains at the top of the G7 inflation league table, roughly a percentage point above the US and nearly double the Eurozone rate - inflation in the UK appears to be taking a different trajectory,"
"Today's figures are not good viewing for those hoping for a cut to interest rates when the Monetary Policy Committee (MPC) meet tomorrow. With wage growth and services inflation running hot, the MPC is very likely to keep rates on hold. However, given the economy is growing slower than desired, we expect at least one more interest rate cut before the end of the year - as long as inflation doesn't escalate much further."
Inflation held at 3.8% in August, remaining almost double the Bank of England's 2% target. Persistent inflation is fuelled by a tight labour market, rising wages, transport and fuel costs, higher airfares, and elevated services-sector prices. The UK sits atop the G7 inflation table, about one percentage point above the US and roughly double the Eurozone rate, reflecting greater exposure to energy price shocks, higher employers' National Insurance contributions, weak productivity, and labour shortages. The Bank of England sees inflation peaking near 4% by September before a gradual decline into 2026. Elevated gilt yields raise debt-interest costs and constrain fiscal headroom, tilting policy toward supply-side measures while leaving scope for at least one rate cut later if inflation eases.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]