'A short calm before the storm resumes': BoE likely to maintain pressure despite inflation dip

0.5% interest rate hike now more likely

Valeria Martinez
clock • 3 min read

UK CPI dipped for the first time since 2021 in August, but underlying inflation forces will keep pressure on the Bank of England to further accelerate its interest rate hikes, the industry has warned.

Headline inflation eased back from 40-year highs to 9.9%, with the slower increase driven by lower petrol prices. Despite this, core inflation, which strips out volatile food and energy prices, continued to rise, reaching a 30-year high of 6.3%. Ben Laidler, global markets strategist at social investment network eToro, said that today's lower-than-expected UK inflation figure "served up a welcome surprise, providing a small glimmer of positivity for our faltering economy". Nicholas Hyett, investment analyst at Wealth Club, said that while the moderation in inflation is welcome, he not...

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