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13 June 2018

Inflation steady at 2.4%, but for how long?

UK inflation remained at 2.4% during May, while fuel rose by its highest level since January 2011, according to the Office for National Statistics.

Joel Dungate, Investment Analyst at investment management and stockbroking firm Redmayne Bentley, said: “There were no surprises with the May inflation figure, which was in line with forecasts. Consequently, it won’t be giving the Bank of England any headache and the strong consensus is that the monetary policy committee will stand pat on rates when it meets next week.

“In the longer run though, falling inflation, coupled with rising wages, is likely to favour a gradual rise in rates. With wage growth currently at 2.8%, the British public can hopefully begin to notice a little more change in their pockets. However, if the trend of rising oil prices (in May the price of fuel rose by its biggest monthly amount for over seven years) and a fall in the value of the Pound continue, we could expect inflation to creep up again in the coming months.”

 

Inflation steady at 2.4%, but for how long?
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