British Inflation Slows Unexpectedly in June, Easing Pressure on Bank of England

📌 British inflation fell by more than expected in June and was at its lowest in more than a year at 7.9%, according to official data that will ease some of the pressure on the Bank of England to keep on raising interest rates sharply. Economists had predicted that the Consumer Price Index (CPI) for the 12 months to June would decrease to 8.2% from May’s 8.7%, but the actual figure of 7.9% exceeded their expectations.

📌 Investors adjusted their expectations for further interest rate hikes from the Bank of England. Markets now suggest that a 25-basis point increase in rates is more likely next month than the previously expected 50-basis point hike.

📌 Food and non-alcoholic drink price inflation also slowed down, providing some relief for households. However, the Bank of England remains concerned about strong wage growth and expects inflation to stay elevated until early 2025.

📌 Overall, the data indicates a positive development for the British economy, with inflation easing, but the central bank remains cautious about future price levels and their potential impact on monetary policy.

Source: Investing