Bank of England Base rate & other news

[Martin@AS Financial]

UK inflation back to 2% target for first time since 2021

This is fantastic news and it will be interesting to see when this will translate to a BOE rate cut.

Full story here:

https://www.reuters.com/markets/euro...21-2024-06-19/

[escapeUK]

UK inflation back to 2% target for first time since 2021

This is fantastic news and it will be interesting to see when this will translate to a BOE rate cut.

Seem more of a fantastic lie, and of course the timing is perfect for the Consocialists election. I'm sure that's just a total coincidence though!

[Paddy]

Seem more of a fantastic lie, and of course the timing is perfect for the Consocialists election. I'm sure that's just a total coincidence though!

Yes and no.
https://www.ons.gov.uk/economy/infla...dservices/2024

The selection of items is ridiculous, for example Air fryers that have dropped in price 50%, colour cake sprinklers and data charges for for mobile phones. CPI no longer reflects the weekly shopping basket for necessities.

[jamesbrown]

UK inflation back to 2% target for first time since 2021

This is fantastic news and it will be interesting to see when this will translate to a BOE rate cut.

Full story here:

https://www.reuters.com/markets/euro...21-2024-06-19/

Only in the headline sense, not in the details. Implied bank rate actually increased on this news. First cut is unlikely to happen before September.

[Lance]

Yes and no.
https://www.ons.gov.uk/economy/infla...dservices/2024

The selection of items is ridiculous, for example Air fryers that have dropped in price 50%, colour cake sprinklers and data charges for for mobile phones. CPI no longer reflects the weekly shopping basket for necessities.

It's not supposed to be about necessities.
The biggest oddity of CPI measurement is it includes VAT (not on food obvs). If government wants to drop inflation by 10% they simply halve the VAT rate.


The suggestion that the Tories have cooked the books on this is mind bogglingly brain dead though.

[Martin@AS Financial]

Interestingly, it was a strong majority at 7/2 to maintain 5.25%.

Full report here:

https://www.bankofengland.co.uk/-/me...-june-2024.pdf

[Paddy]

Interestingly, it was a strong majority at 7/2 to maintain 5.25%.

Full report here:

https://www.bankofengland.co.uk/-/me...-june-2024.pdf

Which goes to show interest rates have more to do with the banks' profits and government bonds rather than consumer spending

[jamesbrown]

Interestingly, it was a strong majority at 7/2 to maintain 5.25%.

This was the market expectation.

[Smoggy]

Annualised CPI inflation measured over the last 6 months is 3.4%. Inflation is proving to be quite sticky. I don't think we'll be seeing more than a token drop to rates for a while.

[Martin@AS Financial]

BOE Financial Stability Report for Q2 makes for some interesting reading as it talks about uncertainty on the world stage, UK banking reliance and UK household debt.

Full report here:

https://www.bankofengland.co.uk/-/me...-june-2024.pdf