Market comment

UK CPI inflation shows surprise fall to 6.7% in August


Markets have pared back their bets that the Bank of England will raise interest rates tomorrow (September 21st), sterling is under pressure, following this morning’s CPI inflation data showing a surprise fall to 6.7% in August. Specifically, core inflation fell sharply to 6.2%. However, with total pay growth accelerating to 8.5% in July, ahead of the Bank’s forecasts, we still believe that the Monetary Policy Committee (MPC) is more likely than not to follow through with a 25bp rate hike to 5.5%.

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Sep 20 2023, 08:40 IST/BST