There are some encouraging signs that the upward pressure on underlying inflation from global factors has started to ease. But as it is being replaced by stronger upward pressure from domestic factors and as CPI inflation will probably still rise from 9.4% in June to 12.0% in October, we still think the Bank of England will raise interest rates from 1.25% to 3.00% even when the economy is in recession.
UK Drop-In (20th July, 10:00 ET/15:00 BST): Could high inflation tip the UK economy into recession? What impact will the race to succeed Boris Johnson have on the economic and policy outlook? Join our UK team for a 20-minute briefing to mark the publication of their Q2 UK Economic Outlook. Register now.
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