Aberdeen: UK inflation lower than expected
Luke Bartholomew, Deputy Chief Economist at Aberdeen, comments on the UK inflation figures:
'With inflation coming in softer than expected again, the pressure on the Bank of England to hike rates this year will continue to fade, although there may still be a couple of policymakers who vote for a rate increase tomorrow. Despite energy prices having fallen recently, there is more inflationary pressure to come for the UK, when the Ofgem price cap moves higher next month.
So, the Bank will still want to remain vigilant to the impact of higher household energy bills on broader inflation expectations. But with the economy otherwise relatively weak, it is plausible speculation begins to turn once again to when the Bank will cut rates again, not hike.'