Saturday, August 2, 2025

Latest

UK’s Stubborn Inflation Fuels Expectations for More BoE Rate Hikes

UK’s inflation rate, which was expected to fall more significantly, dropped marginally to 8.7% in April from 10.1% in March, keeping it at par with Italy for the highest inflation rate among the G7 countries.

Economists had projected a fall to 8.2%, distancing it from the October’s 41-year high of 11.1%. The BoE’s main inflation indicators— core inflation and service sector price increases, soared to the highest levels since March 1992. Food and drink price inflation has also remained high, decreasing only slightly from 19.2% in March to 19.1%. This inflationary pressure has continued to impact workers’ purchasing power negatively, particularly as wages fail to rise at the same pace.

Such elevated levels of inflation have increased the possibility of additional interest rate hikes, with policy makers forecasting a 100% probability of a 25 basis-point increase in June. Meanwhile, Citi bank revised its expectations, predicting two additional BoE rate hikes instead of one, dismissing any chances of a rate cut in November. Despite inflation’s more hawkish trajectory, Citi remains optimistic, noticing dovish elements, particularly in the services sector, and continues to predict sharp rate cuts through 2024 due to easing cost pressures.

On the other hand, some positive indications are emerging. Prices paid by factories rose at their slowest pace in over two years, at 3.9% from April 2022. The prices factories charged increased by 5.4%, the smallest increase since July 2021, suggesting a potential slowdown in the rise of goods prices which could alleviate some burden for consumers.


Information for this briefing was found via the Office for National Statistics and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

AngloGold Buys Another Gold Junior! Augusta Gold Acquired For $197 Million

Another Gold Deal! Aris Mining Sells Assets To McFarlane

Royal Gold Goes Big | $3.5 Billion Sandstorm Acquisition

Recommended

Tsunami Warnings Spread As Largest Quake Since 2011 Hits Russia

Northern Superior Intersects 1.75 g/t Gold Over 65.0 Metres At Philibert

Related News

Canadian Home Sales Increased in April as Demand Continues to Outweigh Supply

Despite high interest rates and dampened economic conditions, the demand for housing across Canada isn’t...

Tuesday, May 16, 2023, 06:21:00 AM

Trump Tells Fed to Lower Rates ‘Immediately,’ Says He Knows ‘Better than They Do’

US President Donald Trump demanded that the Federal Reserve cut rates immediately on Thursday, citing...

Friday, January 24, 2025, 12:53:00 PM

Canada’s Largest Real Estate Market Goes Cold as Rising Interest Rates Bite

Canada’s largest real estate market has not been faring too well since the Bank of...

Wednesday, October 5, 2022, 03:16:10 PM

New Home Prices Continue to Fall Across Canada Thanks to High Borrowing Costs

The price of a new home in Canada continues to decline, as rising borrowing costs...

Thursday, March 23, 2023, 06:19:00 AM

Fed Officials Prepared to Hike Rates 75 Basis Points Following Alarming Inflation Print

The Federal Reserve is in a position to hike borrowing costs by more than 50...

Tuesday, June 14, 2022, 12:53:10 PM