The Bank of England’s Monetary Policy Committee is due to make a decision on the base rate tomorrow, but with inflation yet again higher than expected, there is little chance of a rate cut.
The markets had been expecting the CPI to fall to 3.3% after April’s shock 3.4% (adjusted from 3.5%) after steep rises in the cost of food and furniture.
With the UK’s economy flagging, there is pressure on the Bank to reduce rates, but it is currently nowhere near achieving its target 2% inflation rate. And, as tensions in the Middle East push up energy costs, economists are expecting it to remain above 3% for the remainder of 2025.
