According to data released on Wednesday by the Office for National Statistics, UK inflation remained sticky in May, registering at 3.4%. Although this was lower than April’s figure of 3.5%, the figure remains markedly higher than the Bank of England’s 2% target, and with the conflict escalating between Israel and Iran, the outlook for inflation has become ever more uncertain as the effect on oil prices has yet to be fully known. The main factor behind the fall from April’s figure was the correction to an error made in transport prices the previous month.
According to data released on Wednesday by the Office for National Statistics, UK inflation remained sticky in May, registering at 3.4%.
As expected, the MPC voted six-to-three to hold interest rates at their current level of 4.25% amid a weakening jobs market, concerns surrounding President Donald Trump’s tariffs, and uncertainty regarding the conflict between Israel and Iran. However, the MPC signaled there may be a cut as soon as August, with the BoE governor Andrew Bailey saying “interest rates remain on a gradual downward path”. The pound remained flat against the dollar at $1.343.
As expected, the MPC voted six-to-three to hold interest rates at their current level of 4.25% amid a weakening jobs market, concerns surrounding President Donald Trump’s tariffs, and uncertainty regarding the conflict between Israel and Iran.
British retail sales fell in May for the first time this year, and much more steeply than expected as consumers bought less food and household goods. Retail sales fell 2.7% compared to the 0.5% fall forecast by economists polled by Reuters, suggesting an end to the bounce in economic activity that began in the first quarter of the year. April’s growth figure had been elevated due to the unusually warm weather according to retailers.
Our specialist's final thought
"Retail sales fell 2.7% compared to the 0.5% fall forecast by economists polled by Reuters, suggesting an end to the bounce in economic activity that began in the first quarter of the year."
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