CPI inflation fell to a 17-month low of 6.8% in July, as the effects of the lower utility price cap kicked in. But with services price inflation rising from 7.2% to 7.4% (Bank of England forecast 7.3%) and wage growth still strengthening, this supports our view that the Bank will press ahead with another 25 basis points hike (bps) (from 5.25% to 5.50%) in September.
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