The UK inflation rate has increased to 3%, prompting concerns. However, the Bank of England is expected to persist with interest rate cuts through 2025. Factors such as heightened employer National Insurance Contributions, a rise in the National Living Wage, and substantial increases in household utility bills are contributing to inflated prices. Yet, these price adjustments are seen as regulated and temporary. The Bank remains focused on long-term sustainable inflation, reassuring the public that current levels won’t evoke panic.
Despite the sharp rise in the inflation rate to 3%, the Bank of England is unlikely to halt its interest rate-cutting plan, given the temporary nature of the current inflation.
With utility bills and other regulated price increases driving the current inflation, the Bank of England is set to continue cutting interest rates through 2025.
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