Negative interest rate debate becomes 'very real' as UK inflation plunges to 0.8%

Lowest CPI reading since August 2016

Mike Sheen
clock
Bank of England governor Andrew Bailey
Image:

Bank of England governor Andrew Bailey

The debate concerning negative interests in the UK has now become “very real” after the UK CPI 12-month inflation rate dipped to 0.8% in April from 1.5% in March, recording its lowest reading since August 2016 and putting it on course to hitting 0% in the coming months, according to market commentators.

Office for National Statistics (ONS) figures released this morning (20 May) show that CPIH, which also measures owner occupiers' housing costs, was 0.9%, down from 1.5% a month earlier, as the impact of lockdown affects goods prices across the economy. BoE cuts rates to 0.1% in latest pandemic response The largest drag on the 12-month rate, according to the ONS, was a fall in energy and fuel pump prices largely owing to the collapse in oil prices, which resulted in a 0.35 percentage point reduction in the rate from the housing, water, electricity, gas and other fuels sector. Meanwh...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Economics

There are concerns that the windfall tax will discourage investment into energy in the UK
UK

No energy company 'in their right mind' would set up in the UK now

Windfall tax may dampen energy sentiment

clock 01 July 2022 • 4 min read
The Bank of England said last month that it anticipates UK inflation will top 11% in October.

Andrew Bailey: Soaring inflation to hit UK economy harder than other nations

0.5pp hike on the table

clock 30 June 2022 • 2 min read
Small-caps look to “boost their future cash surplus” during recession.
UK

Miton's Gervais Williams: Recession may favour 'immature businesses'

FTSE Small Cap down 15% year-to-date

clock 29 June 2022 • 2 min read
Trustpilot