"Today's inflation report is little more than a relic of the world before the Iran conflict. The outlook for inflation has radically changed, and the energy price shock will start to show up in next month's data."
"Clearly, the Bank of England is worried about inflation. Policymakers may decide they do not have the luxury of looking through higher inflation, especially if the conflict lasts longer than expected."
"Brent crude is at $95.60, a drop of around 4 percent compared to yesterday. Sticking below the $100 marker might be psychologically important, suggesting an end to the Iran war might be in sight."
The inflation outlook has shifted dramatically since the onset of the Middle East conflict, according to an economist. The latest inflation report reflects a pre-conflict scenario, while recent PMIs indicate that energy price shocks will impact future inflation data. The Bank of England is concerned about rising inflation, especially if the conflict persists. Although the economy shows underlying weakness, policymakers may not ignore higher inflation. Oil prices remain a critical factor, with Brent crude currently at $95.60, and the 2-year UK bond yield has fluctuated, affecting interest rate expectations.
Read at www.independent.co.uk
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