UK inflation disappoints UK inflation fell less than expected in March.
March YoY CPI was 3.2%. In February CPI was at 3.4%. CPIH was unchanged. This is CPI including housing costs. M
arch core inflation hit 4.2%. In February this was 4.5%. Core inflation in the UK is a measure of inflation that does not consider energy and food prices. Economists predicted CPI to reach 3.1% and so this number is slightly higher. The largest downwards pressure came from food prices. However, oil prices have risen, placing upwards pressure. This level of inflation is lower than that of the US. This fall in inflation has talks for rate cuts being pushed back. Traders are betting for rate cuts in September or November. Currently the rate sits at 5.25%, the highest rate in 16 years. Governor Andrew Bailey said, “we’re not yet at the point where we can cut interest rates, but things are moving in the right direction”. The IMF predicted UK inflation to drop to 2.5% by the end of 2024 and 2% by the end of 2025