While the rise in CPI inflation from 3.6% in June to 3.8% (consensus and Capital Economics forecast 3.7%) will fuel speculation that further interest rate cuts are off the agenda this year, the Bank of England expected such a rise, so we doubt the figures will move the dial too much on the outlook for interest rates. A rate cut in November remains our base case, although the decision will be a close call and will depend on the data released over the next few months.
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